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Monetary Policy

Monetary Policy. Monetary Policy. Monetary policy is essentially a program of action undertaken by the monetary authorities, generally the central bank to control and regulate the supply of money with the public and the flow of credit with a view to achieving predetermined macroeconomic goals .

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Monetary Policy

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  1. Monetary Policy

  2. Monetary Policy • Monetary policy is essentially a program of action undertaken by the monetary authorities, generally the central bank to control and regulate the supply of money with the public and the flow of credit with a view to achieving predetermined macroeconomic goals

  3. Instruments of Monetary Policy Quantitative Measures • Open Market Operations • Bank rate/discount rate • CRR • SLR Qualitative or Selective Credit Controls • Credit rationing • Change in lending margins • Moral suasion • Direct control

  4. Limitations of Monetary Policy • The time lag – Inside lag and outside lag • Problem of forecasting • Non baking financial intermediaries • Underdeveloped money and capital market

  5. Thanks

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