West Asia conflict impact dominated MPC meeting discourse

📌 Summary:

• The minutes of the last Monetary Policy Committee (MPC) meeting (released June 19) show members broadly agreed the prolonged West Asia conflict is the most significant risk to India's economic outlook
• Transmission channels flagged: disruption of energy supplies, higher crude oil prices, elevated shipping and insurance costs, and uncertainty around the Strait of Hormuz
• These were seen to raise concerns over inflation, growth, external balances and financial-market stability

🎯 UPSC Relevance: GS3 economy — external/geopolitical shocks, the oil-price–inflation linkage, and monetary policy under uncertainty.

📝 Prelims Facts:

• MPC is a 6-member committee under the RBI Act (amended 2016); it sets the policy repo rate and meets bi-monthly
• The CPI inflation target is 4% (±2%)
• The Strait of Hormuz is a key chokepoint carrying roughly a fifth of global oil

🔑 Key Term: Monetary Policy Committee (MPC) — the statutory body that fixes the policy repo rate to achieve the CPI inflation target.