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Role of Central Bank - Understanding Monetary Policy (for UPSC CSE)
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This lesson goes beyond the introduction and covers the extremely important role of RBI in determining monetary policy - how it acts as a banker to the banks, banker to the government, lender of the last resort, as a controller of the credit, how it announces monetary policy 6 times a year and ends with the discussion on Qualitative and Quantitative instruments of Monetary Policy.

Ayussh Sanghi is teaching live on Unacademy Plus

Ayussh Sanghi
Passionate Educator - CSE / Other Govt Exams [Peep into my Unacademy Plus Courses & experience awesome learning.]

Unacademy user
How can we learn all the formulas of maths and physics, their derivations and reaction mechanism of organic chemistry...will u please suggest the method for these Ma'am
Binati Sheth
2 years ago
Ohh I am doing a course soon which has unconventional ways to remember and learn stuff. Organic chemistry is easy - understand, really understand catenation, hydrogenation, oxidation, reduction (catalyst you’ll have to remember)... physics is honestly one of the easiest subjects of the concept sinks in - say you’re working on a derivation right - you know the definition of the law say Ohms law but once you understand the difference between v is directly proportional to I and I is proportional to v (1/r) being the constant; all physical conditions of the conductor remains constant ~ derivations will become like a piece of cake (here you’ll have to remember the assumptions )... reactions, well, This is the periodic table noble gases are stable halogens and alkalis react aggressively, each period we will see new outer shells while new electrons are added moving to the right :) Happy learning!
Sir Can you Please tell me what do you mean by Lender of the Last Resort.
sir plz tell me weather rate of interest decided by rbi or banks itself
sir u missed out discussing types of monetary policy

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  3. FUNCTIONS OF CENTRAL BANIK k Custody and Management of Foreign Exchange Reserves. k Acting as a Bank to the Banker Acting as a Banker to the Government Central Bank as the Lender of the Last Resort Central Bank as the Controller of Credit

  4. Central Bank as the Controller of Credit The central bank of a country exercises discretionary control over the monetary system of the country. * The central bank of a country exercises discretionary It commands an important position in the monetary and banking structure of the country

  5. Central Bank as the Controller of Credit From all functions mentioned in the previous slide, control of credit is the most important. ak essential for economic stability and orderly growth of an economy.

  6. Central Bank as the Controller of Credit * The Reserve Bank of India announces the Monetary Policy six times a year. This policy determines the supply of money in the economy and the rate of interest charged by banks The policy also contains an economic overview and presents future forecasts.

  7. Central Bank as the Controller of Credit * The instruments of monetary policy are: Quantitative Qualitative

  8. Qualitative Instruments Margin requirements, Consumer credit regulation and guidelines, Moral Suasion and Direct Action

  9. Quantitative Instruments Bank rate, Statutory Liquidity Ra Cash Reserv Repo Rate k Statutory Liquidity Ratio, * Reverse Repo Rate * Open Market Operations