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  • Monetary Policy of RBI

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    Kirti Park
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    The document outlines the objectives and process of India's monetary policy. It discusses maintaining price stability, controlled bank credit expansion, inflation, unemployment, and exchange rates as objectives. The monetary policy committee sets policy which is implemented by the Reserve Bank of India's monetary policy department and financial markets committee. Key policy instruments include the repo rate, reverse repo rate, liquidity adjustment facility, marginal standing facility, cash reserve ratio, statutory liquidity ratio, and open market operations. The rates are used to increase or decrease money supply and maintain the inflation target band. Recently rates were reduced to support the economy during the COVID-19 pandemic.

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    Monetary policy

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    Monetary policy of RBI

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    The document outlines the objectives and process of India's monetary policy. It discusses maintaining price stability, controlled bank credit expansion, inflation, unemployment, and exchange rates as objectives. The monetary policy committee sets policy which is implemented by the Reserve Bank of India's monetary policy department and financial markets committee. Key policy instruments include the repo rate, reverse repo rate, liquidity adjustment facility, marginal standing facility, cash reserve ratio, statutory liquidity ratio, and open market operations. The rates are used to increase or decrease money supply and maintain the inflation target band. Recently rates were reduced to support the economy during the COVID-19 pandemic.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    10 views10 pages

    Monetary Policy of RBI

    Uploaded by

    Kirti Park
    The document outlines the objectives and process of India's monetary policy. It discusses maintaining price stability, controlled bank credit expansion, inflation, unemployment, and exchange rates as objectives. The monetary policy committee sets policy which is implemented by the Reserve Bank of India's monetary policy department and financial markets committee. Key policy instruments include the repo rate, reverse repo rate, liquidity adjustment facility, marginal standing facility, cash reserve ratio, statutory liquidity ratio, and open market operations. The rates are used to increase or decrease money supply and maintain the inflation target band. Recently rates were reduced to support the economy during the COVID-19 pandemic.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    of 10

    CLASS :- TYBAF DIV.

    :- A
    556 - Suraj Gupta
    557 - RINKI PAL
    558 - NITIN KUMAR UPADHAYA
    559 - TUBA JAFRI
    560 – NITESH NALAWADE
    ➢
    Objectives of the Monetary Policy of India
    ➢ Price Stability
    ➢ Controlled Expansion Of Bank Credit
    ➢ Inflation
    ➢ Unemployment
    ➢ Currency exchange rates
    Monetary Policy Process
    Monetary policy committee(MPC)

    Reserve Bank’s Monetary policy


    Department(MPD)

    Financial Markets Operations


    Department(FMOD)

    Financial Market Committee(FMC)


    Monetary Policy Instruments
    ➢ Repo Rate
    ➢ Reverse Repo Rate
    ➢ Liquidity Adjustment Facility (LAF)
    ➢ Marginal Standing Facility (MSF)
    ➢ Corridor
    ➢ Bank Rate
    ➢ Cash Reserve Ratio (CRR)
    ➢ Statutory Liquidity Ratio (SLR)
    ➢ Open Market Operations (OMOs)
    Repo Rate

    Open Market Reverse


    Operations
    (OMOs) Repo Rate

    Liquidity
    Statutory
    Adjustment
    Liquidity
    Ratio (SLR) Monetary Facility
    (LAF)
    Policy
    Instruments

    Marginal
    Cash
    Standing
    Reserve
    Facility
    Ratio (CRR)
    (MSF)

    Bank Rate Corridor


    Data Analysis & Interpretation :-
    Conclusion
    ➢ To maintain the goal of the monetary policy framework and keep
    the inflation in the band of 2% above and below the 4% inflation
    target the RBI has used the monetary policy instruments to increase
    or decrease the supply of money in the economy.
    ➢The Reserve Bank of India had reduced the repo rate and reverse
    repo rate to 4.40% and 4.00% on 27 March. However, with
    coronavirus pandemic hurting the economy, the central bank has
    reduced the reverse repo rate by another 25 basis points on 17 April.
    Following the reduction, the reverse repo rate stands at 3.75%.
    ➢On 27 March, the central bank had reduced the Marginal Standing
    Facility (MSF) rate and the bank rate to 4.65% respectively.

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