Monetary Policy


 
 
Concept Explanation
 

Monetary Policy

Monetary Policy

Monetary Policy refers to the policy of Central Bank (RBI) to regulate the availability, cost and use of money and credit by RBI under the RBI ACT, 1934 and this act was further amended in May 2016.Monetary policy means the policy of the central bank (RBI) with the object to administer and control the country's money supply including currency, demand deposits and foreign exchange rates Reserve Bank of India announces Monetary Policy every year in the Month of April. This is followed by three quarterly reviews in July, October and January. But RBI, at its discretion, can announce the measures at any point of time.

Structure of Monetary Policy

Monetary Policy Committee (MPC) consists of 6 members which is constituted by Central Government by notification in official gazette under section 45ZB of the amended RBI ACT 1934.

.... (More Text Available, Login?)
Sample Questions
(More Questions for each concept available in Login)
Question : 1

Under which qualitative tool, RBI fixes maximum limit to loan and advance that can be made above which the commercial banks cannot exceed ?

Right Option : A
View Explanation
Explanation
Question : 2

Which of the following is/are the objective (s) of monetary policy ?

I. To anchor inflation expect-ion.

II. To actively manage liquidity

III. To maintain interest rate regime output & financial stability.

 

Right Option : B
View Explanation
Explanation
Question : 3

Whenever RBI does some open market operation transaction, actually it wishes to which of the followings ?

Right Option : B
View Explanation
Explanation
 
 


Students / Parents Reviews [20]