Hello Friends,
As you all know that major functions of RBI (Reserve bank of India) is to control inflation and liquidity in the economy.So, we are here with discussion regarding various tools with RBI that directly impacts the money supply in the economy.
Impact on decrease in SLR
Commercial banks need to keep less liquid funds → Provides more loans to people → Higher demand for good sand services → Higher prices
Impact of increased CRR
Less money with Commercial banks → Less money with people → Lower demand for goods and services → Lower prices
Impact of decreased CRR
Impact
Impact of purchasing securities
Impact of selling
Repo rate
It is the rate at which RBI lends money to commercial banks against securities in case commercial banks fall short of funds.
Reverse Repo Rate
Rate at which RBI borrows money from commercial banks.
Hola! If you haven't heard this quote yet, take a moment to read it here.…
"Think good an good follows. Think evil and evil follows. Think creative and creativity will…
Better late than never! Apologies for the delay in responding, but I'm here now to…
By providing accurate information, context, promoting critical thinking, raising awareness, connecting global and local issues,…
Current affairs coverage often showcases stories of individuals and communities making a positive impact. Q1.…
Current affairs coverage helps individuals understand the interconnectedness of global and local events. It shows…