Review of the Monetary Policy of The Central Bank

 

As we know in this pandemic time the Indian Economy is going through a worse period where unemployment rate is high, income of people are low and low business scopes are there so here the work of The Reserve Bank of India is crucial. The RBI has the sole responsibility along with the Indian Government in recovery of the economy. There is a stagflation situation prevailing currently where the GDP is low, unemployment rates are high, earnings are low but there is a high rate of inflation. So the RBI is taking steps to control this situation. It has advised the government to control its non developmental expenses, focus on capital expenditure and promote exports.

Here is a table showing RBI's latest policy rates:

The RBI regularly revises its policy rates to tackle different economic situations. In inflationary period, to control the money flow it increases the CRR, reverse repo rate, bank rate and decrease the repo rate to decrease the flow of cash in the economy like in current situation it did the same whereas in the time of recession it inverts its policy rate. It also uses open market operations policy, marginal requirements and selective credit policy to achieve its goals.

 It coordinates with the government and take appropriate measures how to control fiscal deficit, improve infrastructure, increase employment rates and finally achieve no hunger and zero poverty which is a sustainable goal also.