Monetary Policy Instruments

intermediate26 min read

The objective of monetary policy and the tools the RBI uses: the policy repo rate and the liquidity corridor (SDF and MSF), the bank rate, CRR and SLR, open market operations, and the role of the Monetary Policy Committee. Current numeric values are given only as a dated snapshot.

What you will be able to do

State the objective of monetary policy under the flexible inflation-targeting framework.
Explain the repo rate and how the SDF and MSF form the liquidity corridor.
Distinguish quantitative tools (CRR, SLR, OMO) from the price tool (the policy rate).
Describe the composition and decision rule of the Monetary Policy Committee.

What is inside this lesson

1The objective
2The policy repo rate and the liquidity corridor
3Current values - a dated snapshot
4CRR, SLR and the bank rate
5Open market operations and other tools
6The Monetary Policy Committee
7Common confusions
8Quick revision

The lesson itself is for members

Reading the 8 sections above, the worked examples and the practice set is free — the whole knowledge base is on the free plan, along with flashcards, private notes and Ask Onely.

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