The Monetary Policy Committee maintained a hawkish stand on the interest rates. In this context, 'hawkish' stand means __________.

Question

Question

This question was previously asked in

SSC CHSL Exam 2023 Tier-I Official Paper (Held On: 03 Aug, 2023 Shift 1)

Answer 1

The correct answer is interest rates were increased. Key Points

A hawkish stand on interest rates means that the central bank or monetary policy committee is inclined towards raising interest rates in order to control inflation.
This is usually done to prevent the economy from overheating due to excessive borrowing and spending, which can lead to inflation.
In contrast, a dovish stand on interest rates means that the central bank is more likely to lower interest rates to stimulate economic growth and borrowing.

Additional Information

The term "hawkish" comes from the idea of a hawk, which is known for being aggressive and vigilant.
A hawkish monetary policy is characterized by a more aggressive stance toward controlling inflation and maintaining price stability.
In contrast, a "dovish" monetary policy is named after the image of a dove, which is associated with peace and tranquility.
A dovish policy is more focused on stimulating economic growth and reducing unemployment, even if it means accepting a higher level of inflation.