Volume : VI, Issue : V, May - 2017

MONETARY POLICY, METHODS OF CREDIT CONTROL AND AUTONOMY OF CENTRAL BANKS IN INDIA

Prof. R. Abbaiah, Dr. Morusu Siva Sankar, Dr. C. Venkateswarlu

Abstract :

 In India, the objectives of monetary policy evolved for maintaining price stability and ensuring adequate flow of credit to the productive sectors of the economy. With progressive liberalization and increasing globalization of the economy, maintaining orderly conditions in the financial markets emerged as an additional policy objective. Thus, monetary policy in India endeavours to maintain a judicious balance between:   Ø   Price stability   Ø   Economic growth   Ø   Financial stability.   The case of price stability as the prime objective of monetary policy rests on the assumption that volatility in prices creates uncertainty in economic decision making. Rising prices affect savings adversely while they make speculative investments more attractive. The most important contribution of the financial system to an economy is its ability to augment savings and allocate resources more efficiently Monetary Policy in India   Operating procedure refer to the day to day management of monetary conditions consistent with the overall stance of monetary policy. It is in essence the ‘nuts and bolts’ of monetary policy. It involves four activities, viz.,   v   The choice of the operational target;   v   The nature, extent and the frequency of different money market operations by the central bank; v   The use and width of the corridor for very short–term market interest rates; and v   The manner of signalling policy intentions.

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Article: Download PDF   DOI : 10.36106/ijsr  

Cite This Article:

Prof.R.ABBAIAH, Dr. MORUSU SIVA SANKAR, Dr. C. VENKATESWARLU, MONETARY POLICY, METHODS OF CREDIT CONTROL AND AUTONOMY OF CENTRAL BANKS IN INDIA, INTERNATIONAL JOURNAL OF SCIENTIFIC RESEARCH : VOLUME-6 | Issue‾5 | May‾2017

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