Maddy Monetary Policy Pres

7/23/2019 Maddy Monetary Policy Pres

http://slidepdf.com/reader/full/maddy-monetary-policy-pres 1/7

Instrum

ents ofMonetar

y Policy

Mandeep Yadav



TOOLS OF MONETARYPOLIY

There are two kinds of tools:

Quantitative tools –control

the volume of credit andinflation, indirectly.

Qualitative tools –theycontrol the supply of money

in selective sectors of the

economy.



•

M i n i m u m r a t e a t ! " i c " t " e

c e n t r a l # a n $ p r o v i d e s l o a n s t o c o m m e r c i a l # a n $ s

%an$ Rate

• A m o u n t o f m o n e y t " a t # a n $ s m u s t s e t a s i d e ! i t " R % I a & a i n s t t " e i r d e p o s i t s

as" ReserveRatio 'RR(

• P e r c e n t a & e o f # a n $ f u n d s t o # e m a i n t a i n e d i n & o v e r n m e n t a n d

a p p r o v e d s e c u r i t i e sStatutory

Li)uidityRatio 'SLR(

• R a t e a t ! " i c " R % I l e n d s t o o t " e r # a n $ s a & a i n s t & o v e r n m e n t s e c u r i t i e s

Repo Rate

• R a t e a t ! " i c " R % I # o r r o ! s f r o m o t " e r # a n $ s

Reverse RepoRate

•

P u r c " a s e a n d s a l e o f s e c u r i t i e s i n

t " e o p e n m a r $ e tOpen Mar$et

Operations'OMO(

Monetary Policy * Terminolo&y



urrent Rates



Target Variables

-Inflation

-Interest rate-Real GDP

-Employment

-Consumption

-Savings-Investment

Policy Variables

- Money supply

- OMO: Liquiity !onitions

- poli!y rates "CRR# repo et!$%

Monetary Policy * In+uence





Documents

Maddy Monetary Policy Pres