RBI Monetary policy
RBI monetary policy 2022 is the policy formulated by the Reserve Bank of India to regulate the money matters of country . The policy takes into account the destribution of credit among users as well as the rate of interest on borrowing and lending
Since India is developing country, monetary policy is significant in the promotion of
Economic growth . The policy involve measure taken to control inflation regulate the suply of money and the cost of credit inthe economy , the various instruments of monetary policy include the variation in bank rates , other interest rates , supply of currency etc. In addition to that the current repo rate , reserve repo rate , marginal standing facility rate and bank rate also come under RBI monetary policy
On 4th may 2022 , RBI kept the repo rate unchanged 4.40 % , reserve repo rate 3.35% , in addition to that the marginal standing facility rate and bank rate stands at 4.25%
Key highlights of RBI monetary policy
⚫. Benchmark landing rate kept unchanged 10th time in a row at 4% and reserve repo rate at 3.35 %
⚫ project GDP growth at 7.8% for next fiscal against 9.2 this fiscal
⚫ RBI to continue with accommodative stance to revive and sustain growth . Pandemic hold the global economy hostage
⚫ Retail inflation projected at 5.3 % for current fiscal , 4.5% in FY 23
⚫ RBI extends by three months on tap liquidity facility of 50,000 crore for healthcare
Contect intensive sector
⚫ E - RUPE digital voucher cap raised from 10,000 to 10,0000 and multiple use permitted
Objectives of recent monetary policy of RBI
The main objectives of recent monetary policy of RBI are as follow.
👉 Controlling inport and export -: the monetary policy helps industries to get a loan at a reduced interest rate , which means they can substitute import with export oriented unit's and in turn increase export.
👉 Promotion of saving and investing -:
A monetary policy can impact the savings and investments of people , a higher rate of interest will result in greater investments and saving , thereby maintaining a healthy cash within the economic is one of the motives .
👉Managing businesses cycles -: there are two main stage of a business cycles , boom and depression . Monetary policy is one of the most efficient financial tools that can help to control the boom and depression period of business cycle by managing credit destribution and supply of money in the economic
👉 Employment generation -: A monetary policy can lead to reduce interest rate , which means small and medium enterprises can easily secure a business loan to expend their businessbusiness
👉 development of infrastructure -: the monetary policy by RBI allows concessional funding for the development of infrastructure within the country
👉 Developing and managing banking sector -
The central bank is responsible for managing the entire Banking industries
RBI also instruct others bank using the monetary policy to establish rural branches
For agriculture development , wherever required , additionally ,the government has also set up cooperative and reginal rural bank to helps farmers receive financial aid they required in on time
monetary policy tools
It's used to control inflation , the reserve Bank of India needs to increase the cost of funds , reduce the supply of money with the help of tools which are devided into two categories, qualitative and quantitative tools
👉Quantitative tools-: quantitative tools are related to quantity and volume of the moneny
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