What is the main purpose of monetary policy?

The main purpose of monetary policy is to achieve economic growth, maintain a healthy inflation rate which will help in maintaining a robust economic growth and maintain price stability. You can read about the Monetary Policy – Objectives, Role, Instruments  in the given link.

Expansionary monetary policy is used when there is recession or economic slowdown.

Further readings:

  1. Monetary Policy Committee (MPC) – Structure, Objectives UPSC Notes
  2. Monetary System – Types of Monetary System 

Related Links

Indian Economy Notes for UPSC Civil Service Exam

The Reserve Bank of India: Functions and Composition

Cash Reserve Ratio (CRR) – Importance, Advantages & Effects

Statutory Liquidity Ratio (SLR) – Definition, Objective & Impact

Open Market Operations (OMO) – Types

Previous Years Economics Mains Questions 

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