- BES171/MP#4: MSF, LAF-Repo Rate, RR, Bank Rate, Policy Corridor
- BES171/MP#5: Monetary Policy#5: Review of RBI’s Last One Year’s Bi-monthly Monetary Policies
Prologue: from now on, all Powerpoint available at https://mrunal.org/powerpoint
so far, under the Monetary policy, we’ve learned about money multiplier, cash reserve ratio (CRR), incremental CRR and statutory liquidity ratio (SLR), Open market operations (OMO) and Market stabilization scheme (MSS). Now moving forward:
- Under the quantitative monitoring policy, in this session, we will learn about Bank Rate, Repo Rate, Reverse Repo Rate, marginal standing facility (MSF) and how they can be used to control money supply and to fight against inflation and deflation?
- What is the liquidity adjustment facility (LAF) window?
- What is policy corridor? Why it has been narrowed from 1% to 0.5% by Dr. Raghuram Rajan in April 2016?
Youtube Link: https://youtu.be/NI4SbyjTHMg
- What is monetary policy, how is it different from fiscal policy?
- 3 ways of making monetary policy 1) exchange rate stability 2) multiple indicators 3) inflation targeting.
- In 2013, Dr. Raguram Rajan had setup Urjit Patel Committee to reform the monetary policy making in India. Accordingly, a new section 45-ZB was inserted in RBI act, to provide for a monetary policy committee and inflation targeting.
- GSM2: statutory bodies- Monetary Policy Committee- structure, composition, functions transparency and accountability provisions.
- Trend of repo rate under RBI governor Dr. Raghuram Rajan vs Dr. Urjit Patel. Overview of last one year’s bi-monetary policies from April 2016 to March 2017.
Youtube Link: https://youtu.be/GjOeS2pbjTc
This concludes the quantitative tools of monetary policy, and thus the old L1/P1-P4 Powerpoint shall be considered “Decontentized”.
Next lecture: continued with remaining of qualitative tools of monetary policy.