MONETARY AND CREDIT

POLICY
PRESENTED BY
ANURAG YADAV
ASHISH VATSHAYAYAN
SHUBOJIT SINHA
SHAUVIK SHARKEL
SARANGDHSAR
VISHAL DAVID
• WHAT IS MONETARY POLICY AND
CREDIT POLICY?
• WHY MONETARY AND CREDIT
POLICY?
 TOOLS FOR POLICY
• BANK RATE
• CASH RESERVE RATIO
• SATUTORY LIQUIDITY RATIO
• REPO RATE
 FRAMEWORK OF MONETARY POLICY
IN INDIA
 EFFECT ON DIFFERENT
FACETS?

• WHAT IS IN IT FOR AN INDIVIDUAL?

• HOW DOES IT EFFECT EXPORTERS?
• HOW DOES IT EFFECT STOCK
MARKETS?
 Pains and gains of the
credit policy
Growth appears to be a downward path
and inflation well entrenched at a
double-digit mark. As neither lower
growth nor high inflation are
acceptable, especially since the next
general elections will hopefully be held
against the backdrop of these two
numbers, the rational belief was that
RBI would do nothing to hurt growth,
while inflation would be guided by past
policy decisions as well as improvement
 CREDIT POLICY AND ITS
EFFECT ON INTEREST RATES
• An increase in interest rates
increases cost of borrowing and the
burden would ultimately be passed
on to consumers . This adversely
affects the economy and all other
related sectors. The long-term impact
would be to keep inflation
expectations in check, which should
promote growth in the long run.
 RBI’S CREDIT POLICY AND ITS
EFFECT ON INFLATION
• Monetary and Credit policy has
direct impact on prices of
commodities, inflation and prevailing
interest rates, hence, the growth of
overall Indian economy.
• Control Measures
1) Open Market Operations (OMO)
2) Reserve Requirements
 Monetary Policy
Developments in India
• Growth with Stability
• Poverty and Unemployment
• Consumption and Investment
Demand
• A Reasonable Degree of Price
Stability
• Improved Fiscal Performance
• External Sector
• Financial Markets
A Review of Monetary Policy
Challenges
• GLOBALISATION
• GROWING INTERGRATION OF
FINANACIAL MARKETS
• INFLATION EXPECTATIONS
 Challenges for Emerging
Market Economies
• EME’S DILEMMA OF GRAPPLING
WITHVOLATILE INCREASING CAPITAL
INFLOWS.
• CONSTRAINED CHOICE OF
INSTRUMENTS FOR STERLIZATION OF
LARGE AND UNCERTAIN CAPITAL
FLOWS.
• THANK YOU