Credit Policy,,nit Durgapur

MONETARY AND CREDIT POLICY PRESENTED BY ANURAG YADAV ASHISH VATSHAYAYAN SHUBOJIT SINHA SHAUVIK SHARKEL SARANGDHSAR VISHAL DAVID

• WHAT IS MONETARY POLICY AND CREDIT POLICY? • WHY MONETARY AND CREDIT POLICY?

TOOLS FOR POLICY • • • •

BANK RATE CASH RESERVE RATIO SATUTORY LIQUIDITY RATIO REPO RATE

FRAMEWORK OF MONETARY POLICY IN INDIA

EFFECT ON DIFFERENT FACETS? • WHAT IS IN IT FOR AN INDIVIDUAL? • HOW DOES IT EFFECT EXPORTERS? • HOW DOES IT EFFECT STOCK MARKETS?

Pains and gains of the credit policy Growth appears to be a downward path and inflation well entrenched at a double-digit mark. As neither lower growth nor high inflation are acceptable, especially since the next general elections will hopefully be held against the backdrop of these two numbers, the rational belief was that RBI would do nothing to hurt growth, while inflation would be guided by past policy decisions as well as improvement

CREDIT POLICY AND ITS EFFECT ON INTEREST RATES • An increase in interest rates increases cost of borrowing and the burden would ultimately be passed on to consumers . This adversely affects the economy and all other related sectors. The long-term impact would be to keep inflation expectations in check, which should promote growth in the long run.

RBI’S CREDIT POLICY AND ITS EFFECT ON INFLATION • Monetary and Credit policy has direct impact on prices of commodities, inflation and prevailing interest rates, hence, the growth of overall Indian economy. • Control Measures 1) Open Market Operations (OMO) 2) Reserve Requirements

Monetary Policy Developments in India • Growth with Stability • Poverty and Unemployment • Consumption and Investment Demand • A Reasonable Degree of Price Stability • Improved Fiscal Performance • External Sector • Financial Markets

A Review of Monetary Policy Challenges • GLOBALISATION • GROWING INTERGRATION OF FINANACIAL MARKETS • INFLATION EXPECTATIONS

Challenges for Emerging Market Economies • EME’S DILEMMA OF GRAPPLING WITHVOLATILE INCREASING CAPITAL INFLOWS. • CONSTRAINED CHOICE OF INSTRUMENTS FOR STERLIZATION OF LARGE AND UNCERTAIN CAPITAL FLOWS.

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