Notes/General
GeneralFreeUPSC
RBI & monetary policy toolkit
- Subject: Economy
- Exam: UPSC
- Status: published
- Author: Contributor
- Read: 10 min
RBI & monetary policy toolkit
Mandate (simplified)
- Price stability with growth (flexible inflation targeting framework with Government)
- Issuer of currency; banker to Government and banks; regulator/supervisor of banks
Instruments (memorise with direction)
| Tool | Tightening | Easing |
|---|---|---|
| Repo rate | ↑ | ↓ |
| Reverse repo / SDF corridor | context-dependent | context-dependent |
| CRR / SLR | ↑ liquidity mop | ↓ inject |
| OMOs | sell securities | buy securities |
PYQ focus
- MPC composition and voting
- Inflation target / band
- Difference between monetary and fiscal policy
Summary
Link tools → liquidity/inflation. Pair with Budget/fiscal notes for GS-III coherence.