What are the objectives of Monetary policy? Which instruments are used

Question

What are the objectives of Monetary policy? Which instruments are used by the RBI to attain these objectives? How far the monetary policy has been effective to control the inflation?

07 Aug 2023

Answer :

Word Count : 457

Monetary policy is a critical tool employed by the Reserve Bank of India (RBI) to regulate the economy's money supply, stabilize prices, and promote sustainable growth. The primary objectives of India's monetary policy are as follows:

### Objectives of Monetary Policy:

1. Price Stability: The foremost objective is to maintain price stability by controlling inflation and deflation. Stable prices help create a conducive environment for investment and economic growth.

2. Control of Inflation: Managing inflation within a targeted range (currently 4% ± 2% as per the RBI's mandate) ensures that economic ____ _____ ________ __________ ____ _________ ______ ______ _____ ______ ______ __________.
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