The main objective of monetary policy is to maintain price stability as it is important to sustain economic growth. The goal is to control inflation. You can read about the Monetary Policy – Objectives, Role, Instruments in the given link.
The instruments used by RBI to control monetary policy are repo rate, reverse repo rate, bank rate, cash reserve ratio, open market operations, statutory liquidity ratio.
Further readings:
- Monetary Policy Committee (MPC) – Structure, Objectives UPSC Notes
- Monetary System – Types of Monetary System
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Statutory Liquidity Ratio (SLR) – Definition, Objective & Impact |
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