What is Monetary

Policy?
Monetary policy is a set of economic policy that
manages the size and growth rate of the money
supply in an economy. It is a powerful tool to
regulate macroeconomic variables such
as inflation and unemployment.
 INSTRUMENTS OF MONETARY
POLICY
1. BANK RATE
2. REPO RATE
3. REVERSE REPO RATE
4. SLR (Statutory liquidity ratio)
5. CRR (Cash Reserve Ratio)
6. Open Market Operations
1.Bank Rate-
The rate at which the RBI lends money to commercial
banks without any security or collateral.

2. Repo Rate-
Commercial banks borrow money from the Reserve
Bank of India by selling securities or bonds with an
agreement to repurchase the securities on a certain
date at a predetermined price. Currently, the REPO
RATE is 5.15 per cent.
3. REVERSE REPORATE-
The rate at which the central bank of a country borrows money
from commercial banks within the country. It is a monetary
policy instrument which can be used to control the money supply
in the country. Currently, the REVERSE REPO RATE is 4.9 per cent.

4. SLR
The Statutory liquidity ratio is the Government term for
the reserve requirement that commercial banks are required to
maintain in the form of cash, gold reserves, Reserve Bank of
India (RBI)- approved securities before providing credit to the
customers. Currently, the SLR is 19.5 per cent.
5. Cash Reserve Ratio-
The percentage of bank deposits banks need to keep
with the RBI. CRR is an instrument the RBI uses to
control the liquidity in the system. Currently, the CRR
is 4 per cent.
6. Open Market Operations-
Open market operations refer to sale and purchase of
securities in the money market by the central bank.
 RBI
The Reserve Bank of India (RBI) is India's central banking and monetary
authority who is also responsible for monitoring the foreign exchange
flows into the Indian economy, managing currency exchange rates and
supervising how banks and non-banking financial institutions function.

ROLE OF RBI
Overseeing monetary policy
Issuing currency
Managing foreign exchange
Working as a bank of government
RBI’S MONETARY POLICY FOR 2019-20
 Repo rate and reverse repo rate
 MPC will continue with its accommodative stance
 GDP growth forecast
 The Consumer price inflation (CPI)
 Weak rural and urban demand
Inflation
Global economy loses momentum
Agriculture
 Manufacturing and construction sector activities
looked up in August
Surplus Liquidity
PRESENTED BY:
PRIYANKA NAYAL
SANCHITA GOEL
ANUPRIYA
YASHIKA TANDON
PRIYA GAMBHIR
AASTHA GARG