A PRESENTATION ON

MONETARY POLICY

Presented to: presented by:

Prof.manmeet dhiraj
kaur
Introduction to monetary policy
 Monetary policy is the policy, which
concerned with the measures taken to
regulate the volume of credit, created by
bank.
 Monetary policy is also known as-
EXPANSIONARY or CONTRACTIONARY
POLICY
 Monetary policy is contrasted with fiscal
policy, which refers to government borrowing,
spending and taxation.
Elements of monetary policy
 To regulate the stock & growth rate of money.
 To regulate the stock & growth rate of near
money.
 To regulate level & structure of money.
 To control exchange rate.
Objective of monetary policy
 Price stability
 Economic growth
 Controlled expansion of quantity of money
 To promote saving & expansion
 To control business cycle
 To promote export or imports substituted
 To regulate money supply
 To provide infrastructure
Techniques of Monitary policy
 Quantitative technique
 Qualitative technique
Quantitative technique
 Bank rate
 Statuatory liquidity ratio
 Multiple rate of interest
 Open market operation
 Cash reserve ratio
Qualitative control
 Selective credit control
 Rashioning of credit
 Morale persuation
 Credit authorization scheme(CAS)
 Direct action
Advantages of monetary policies
 Active policy
 Control money supply
 Seasonal variation
 Flexible
 Investment & saving oriented
Limitation of monitary policy
 Restricted scope of monitary policy
 Lack of co-ordination between monitary &
fiscal policy
 Unfavourable banking habits
 Black money
 Conflicting objectives
Thank you