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๐ฆ
๐ Basic Economics
Monetary Policy
RBI controls money supply and interest rates to manage inflation and growth in India
India ๐ฎ๐ณ 1935 Basic Economics
Key Facts
- 1
RBI (Reserve Bank of India, est. 1935) formulates monetary policy; Monetary Policy Committee (MPC) decides rates
- 2
Repo Rate: rate at which commercial banks borrow from RBI; Reverse Repo: rate at which RBI borrows from banks
- 3
CRR (Cash Reserve Ratio): banks must keep 4.5% of deposits with RBI; SLR: must invest 18% in govt securities
๐ Did you know? The Repo Rate is RBI's main tool โ when RBI raises repo rate, loans become expensive โ less borrowing โ less money โ lower inflation
Quick Reference
Category
Basic Economics
Country
๐ฎ๐ณ India
Year / Era
1935
About
RBI controls money supply and interest rates to manage inflation and growth in India