Monetary policy refers to the actions taken by a country’s central bank to manage the economy by controlling the supply of money, interest rates, and inflation. Here’s an overview of its key aspects.

1.      Objectives of RBI’s Monetary Policy
( Price stability, Finance stability, Economic Growth, Employment generation)

2. Key Tools of Monetary Policy:

  Repo Rate: The rate at which the RBI lends money to commercial banks.

Reverse Repo Rate:  The rate at which the RBI borrows money from commercial banks. Increasing the reverse repo rate helps absorb excess liquidity.

Cash Reserve Ratio (CRR): The percentage of a bank’s total deposits that must be kept in reserve with the RBI.

Statutory Liquidity Ratio (SLR): The percentage of net demand and time liabilities that banks must maintain in the form of liquid assets.

Assistant Professor ( BBA Deptt.)

Miss.  Kanu chauhan