PRESENTATION BY:-

Shikha Duggal
 Meaning of Monetary Policy
According to D.C.Rowan
monetary policy is defined as
“discretionary act undertaken
by the authorities designed to
influence
a) The supply of money
b) Cost of money or rate of
interest
c) The availability of money
 Devaluation of Rupees

RBI in extraordinary
condition devaluated
Rupees 3 times in past
► In Sep.1949- 30.5%.
► In June 1966- 36.5%
► In 1991- 20%
► After 1992-93 Rupees
headed towards full
convertibility.
 AIM OF MONETARY POLICY
► Maintain price stability
► Flow of credit to the productive sector of economy
► Stability of national currency
► Growth in employment & income
► Achieving foreign exchange stability
► Managing suitable level of investment and savings
► Regulating rate of interest & induce higher level of
investment
► Achieving monetary equilibrium to ensure equality
between demand & supply of money.
TYPES OF CONTROL
 Factors Effecting Monetary Policies

► Govt. agenda and

development plans
► Inflation and price
situation.
► Credit and liquidity
condition.
► Foreign money inflow
 Monetary policy 2010-2011

► Repo rate hiked by 25 basis points to 5.75 percent

► Reverse repo rate hiked by 50 basis points to 4.5 percent
► Cash reserve ratio unchanged at 6 percent
► Statutory Liquid ratio unchanged at 25 percent
► Bank rate unchanged at 6 percent
► Inflation outlook raised to 6 percent by the end of March
2011 from 5.5 percent projected earlier
► Growth in the gross domestic product for this fiscal is
projected at 8.5 percent against 8 percent earlier.