UPSC Prelims Practice Questions — West Asia impact dominated MPC meeting discourse

Q1. With reference to the resolution of the Reserve Bank of India's Monetary Policy Committee (MPC) at its June 2026 meeting, consider the following statements: 1. The policy repo rate was retained at 5.25%. 2. The monetary policy stance was changed from neutral to accommodative. 3. The CPI inflation projection for 2026-27 was revised upward to 5.1%. 4. The real GDP growth projection for 2026-27 was placed at 6.6%. Which of the statements given above are correct?

  1. The policy repo rate was retained at 5.25%.
  2. The monetary policy stance was changed from neutral to accommodative.
  3. The CPI inflation projection for 2026-27 was revised upward to 5.1%.
  4. The real GDP growth projection for 2026-27 was placed at 6.6%.
  • A. 1, 2 and 3 only
  • B. 1, 3 and 4 only
  • C. 2 and 4 only
  • D. 1, 2, 3 and 4

Q2. Who chaired the June 2026 meeting of the Monetary Policy Committee whose minutes flagged the prolonged West Asia conflict as the dominant external risk to India's growth-inflation outlook?

  • A. Shri Sanjay Malhotra, Governor, Reserve Bank of India
  • B. Shri Shaktikanta Das, Governor, Reserve Bank of India
  • C. Smt. Nirmala Sitharaman, Union Finance Minister
  • D. Dr. Nagesh Kumar, external member of the MPC

Q3. How many members in total constitute the Monetary Policy Committee (MPC) of the Reserve Bank of India under the RBI Act, 1934?

  • A. Four
  • B. Five
  • C. Six
  • D. Seven

Q4. In the context of the Reserve Bank of India's monetary policy, what does the term 'neutral stance' — retained by the MPC at its June 2026 meeting — most precisely mean?

  • A. The MPC retains the flexibility to move the policy repo rate either upward or downward depending on incoming growth-inflation data.
  • B. The MPC commits to keeping the policy repo rate unchanged for a pre-announced fixed period regardless of incoming data.
  • C. The MPC signals a clear bias towards future rate cuts while ruling out any rate hikes.
  • D. The MPC signals a clear bias towards future rate hikes while ruling out any rate cuts.