Question

Explain role and functions od rbi what instruments are used to control.Inflationary and deflationary

Answer 1

Affect money supply by changes in money supply
Use qualitative and quantative instruments of credit control
Quantitative instruments
1)Legal reserve requirements
- CRR
- SLR
2)Bank rate & repo rate
3)Deficit financing

Qualitative instruments
1) credit rationing
2)margin requiments
3)Moral susansation