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International Conference on Humanities, Geography and Economics (ICHGE'2011) Pattaya Dec. 2011

Monetary Policy In India: - Reforms And It’s Evaluation

Dr. Mukund Chandra Mehta

Abstract—In a developing economy, monetary policy has a

special role to play. The aim of Monetary Policy is to control the supply of money, often targeting a rate of interest for the purpose of promoting economic growth and stability. The official goals usually include relatively stable prices and low unemployment. Monetary Policy is related to the availability and cost of money supply in the economy in order to attain certain broad objectives. The Reserve Bank of India keeps control on the supply of money to attain the objectives of its Monetary Policy.

e. Credit Rationing f. Moral Suasion g. Direct Action II. MONETARY MEASURES Latest important banking sector-2011 current repo rate 2011, current repo rate, current MSF rate. RBI has hiked and Reserve Repo rate by 25 bps w.e.f. 16.09.2011.(Repo increased from 8% to 8.25%.Reserve Repo adjusted to 7.25% and MSF 9.25%) .

Bank Rate 6% (w.e.f.) 24.04.2003 6% (w.e.f.) 24.04.2010 Increased from 5%to 5.50% (w.e.f) 13.02.2011 and then again to 5.75% wef 27.02.2011 and now to 6% wef 24.04.2011

Keywords—About four key words or phrases in alphabetical order, separated by commas. I. INTRODUCTION STABLISHED on April 1. 1935, the Reserve Bank of India is the central bank in India. As the countries Central bank, it the apex monetary and financial institution responsible for the efficient working of the monetary mechanism which is indispensible for a rapid development of the economy. Monetary Policy in India is an adjunct of economic policy. It is the management of money supply and interest rates by Central banks to influence prices and employment. It works through expansion or contraction of investment and consumption expenditure. The three major objectives of economic policy in India have been Growth, social justice and price stability....