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Which of the following instruments of Monetary Policy Transmission are available with the Reserve Bank of India?
1. Open Market Operations
2. Varying of Cash Reserve Ratio and Statutory Liquidity Ratio
3. Sterilization by buying and selling of foreigncurrency in the exchange market.
4. Moral suasion
Select the correct answer using the code given below:
- a)1, 2 and 4 only
- b)2, 3 and 4 only
- c)3 and 4 only
- d)1, 2, 3 and 4
Correct answer is option 'A'. Can you explain this answer?
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Which of the following instruments of Monetary Policy Transmission ar...
- The most important role of RBI is as the controller of money supply and credit creation in the economy. RBI is the independent authority for conducting monetary policy in the best interests of the economy.
The instruments that the RBI uses for conducting monetary policy are as follows:
(1) Statement 1 is correct. Open Market Operations (OMO) - RBI purchases (or sells) government securities to the general public in a bid to increase (or decrease) the stock of high-powered
money in the economy.
(2) Statement 2 is correct. Varying Reserve Requirements - CRR and SLR also works through the Reserve Deposit Ratio route. A high (or low) value of CRR or SLR increases (or decreases) the
value of reserve deposit ratio, thus diminishing (or increasing) the value of money multiplier
and money supply in the economy in a similar fashion.
(3) Repo Rate - The (fixed) interest rate at which the Reserve Bank provides overnight liquidity to banks against the collateral of government and other approved securities under the liquidity adjustment facility (LAF).
(4) Statement 4 is correct. Moral Suasion can be undertaken by RBI to persuade commercial banksto follow the monetary policy directives given by the Monetary Policy Committee.
- Statement 3 is incorrect. Sterilization is one of the important functions of RBI where it sterilizes the economy against adverse external shocks. However, it is not an instrument of monetary policy transmission.
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Which of the following instruments of Monetary Policy Transmission are available with the Reserve Bank of India?1. Open Market Operations2. Varying of Cash Reserve Ratio and Statutory Liquidity Ratio3. Sterilization by buying and selling of foreigncurrency in the exchange market.4. Moral suasionSelect the correct answer using the code given below:a)1, 2 and 4 onlyb)2, 3 and 4 onlyc)3 and 4 onlyd)1, 2, 3 and 4Correct answer is option 'A'. Can you explain this answer?
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Which of the following instruments of Monetary Policy Transmission are available with the Reserve Bank of India?1. Open Market Operations2. Varying of Cash Reserve Ratio and Statutory Liquidity Ratio3. Sterilization by buying and selling of foreigncurrency in the exchange market.4. Moral suasionSelect the correct answer using the code given below:a)1, 2 and 4 onlyb)2, 3 and 4 onlyc)3 and 4 onlyd)1, 2, 3 and 4Correct answer is option 'A'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Which of the following instruments of Monetary Policy Transmission are available with the Reserve Bank of India?1. Open Market Operations2. Varying of Cash Reserve Ratio and Statutory Liquidity Ratio3. Sterilization by buying and selling of foreigncurrency in the exchange market.4. Moral suasionSelect the correct answer using the code given below:a)1, 2 and 4 onlyb)2, 3 and 4 onlyc)3 and 4 onlyd)1, 2, 3 and 4Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which of the following instruments of Monetary Policy Transmission are available with the Reserve Bank of India?1. Open Market Operations2. Varying of Cash Reserve Ratio and Statutory Liquidity Ratio3. Sterilization by buying and selling of foreigncurrency in the exchange market.4. Moral suasionSelect the correct answer using the code given below:a)1, 2 and 4 onlyb)2, 3 and 4 onlyc)3 and 4 onlyd)1, 2, 3 and 4Correct answer is option 'A'. Can you explain this answer?.
Which of the following instruments of Monetary Policy Transmission are available with the Reserve Bank of India?1. Open Market Operations2. Varying of Cash Reserve Ratio and Statutory Liquidity Ratio3. Sterilization by buying and selling of foreigncurrency in the exchange market.4. Moral suasionSelect the correct answer using the code given below:a)1, 2 and 4 onlyb)2, 3 and 4 onlyc)3 and 4 onlyd)1, 2, 3 and 4Correct answer is option 'A'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Which of the following instruments of Monetary Policy Transmission are available with the Reserve Bank of India?1. Open Market Operations2. Varying of Cash Reserve Ratio and Statutory Liquidity Ratio3. Sterilization by buying and selling of foreigncurrency in the exchange market.4. Moral suasionSelect the correct answer using the code given below:a)1, 2 and 4 onlyb)2, 3 and 4 onlyc)3 and 4 onlyd)1, 2, 3 and 4Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which of the following instruments of Monetary Policy Transmission are available with the Reserve Bank of India?1. Open Market Operations2. Varying of Cash Reserve Ratio and Statutory Liquidity Ratio3. Sterilization by buying and selling of foreigncurrency in the exchange market.4. Moral suasionSelect the correct answer using the code given below:a)1, 2 and 4 onlyb)2, 3 and 4 onlyc)3 and 4 onlyd)1, 2, 3 and 4Correct answer is option 'A'. Can you explain this answer?.
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