Resources › CA MCQ Practice
28 May 2026Economy3 questions

RBI MPC Holds Repo Rate at 6.25% — Pivot Signals in Policy Commentary

UPSC-standard MCQs with explanations, trap analysis, and approach guide. Answer after the test — not before.

1

Easy

1

Medium

1

Hard

Practice this set

3 questions · full analysis after submission · no sign-up required

Start test →Read the article first

Article summary

The Reserve Bank of India's Monetary Policy Committee held the repo rate unchanged at 6.25% in its April 2026 meeting, marking the second consecutive hold after a 25 basis point cut in February 2026 that broke a five-year rate-hold cycle. The MPC shifted its policy stance from 'withdrawal of accommodation' to 'neutral', signalling readiness to cut further if inflation sustains below the 4% target. Retail inflation (CPI) had eased to 3.6% in March 2026, led by a sharp fall in food prices, while GDP growth held at 6.8% for FY26.

What this tests

recallTests whether you read the article and retained key facts.
1Q
applicationTests whether you can apply the concept to a new scenario.
1Q
analysisTests whether you can reason across multiple related facts.
1Q

Sample questions — answers revealed after test

EconomyRecallEasy

Q1. Under India's inflation targeting framework, which of the following correctly describes the consequence when the Reserve Bank of India fails to maintain CPI inflation within the mandated tolerance band for three consecutive quarters?

AThe RBI Governor is liable to be removed from office by the Central Government.
BThe RBI is required to submit a mandatory written explanation to the Central Government detailing the reasons for the failure and the remedial actions proposed.
CThe Monetary Policy Committee is reconstituted and all six members are replaced by the Government.
DThe Standing Finance Commission is empowered to override the MPC's rate decision for the subsequent quarter.
Answer revealed after you submit the test
EconomyApplicationMedium

Q2. A commercial bank in India holds ₹10,000 crore in net demand and time liabilities (NDTL). Based on the current regulatory requirements, what is the minimum amount (in ₹ crore) this bank must collectively set aside to comply with both the Cash Reserve Ratio (CRR) and the Statutory Liquidity Ratio (SLR) obligations — and which of the following statements about these instruments is correct?

AThe bank must set aside ₹2,200 crore in total; both CRR and SLR balances earn interest from the RBI at the repo rate.
BThe bank must set aside ₹2,200 crore in total; CRR balances earn no interest while SLR securities earn market returns from the underlying government securities held.
CThe bank must set aside ₹1,800 crore in total; CRR is maintained as cash with RBI while SLR can be maintained in gold, cash or approved securities.
DThe bank must set aside ₹2,200 crore in total; both CRR and SLR are maintained exclusively as cash deposits with the Reserve Bank of India.
Answer revealed after you submit the test
EconomyAnalysisHard

Q3. Consider the following statements regarding India's Monetary Policy Committee (MPC) and the RBI's current policy posture: 1. The MPC comprises six members, of whom three are RBI officials and three are external members appointed by the Central Government; all six members have equal voting rights. 2. A shift in the MPC's policy 'stance' from 'withdrawal of accommodation' to 'neutral' is equivalent in signal to an actual reduction in the policy repo rate. 3. The current positive real interest rate in India (repo rate exceeding CPI inflation) implies that monetary policy is in restrictive territory relative to inflation, which tends to compress private investment demand. 4. The reverse repo rate, at which RBI borrows funds from commercial banks, forms the lower bound of the RBI's interest rate corridor. Which of the statements given above are correct?

A1 and 4 only
B1, 3 and 4 only
C2 and 3 only
D1, 2 and 4 only
Answer revealed after you submit the test
Practice all 3 questions →All CA MCQ sets