Question

explain the impact of change in crr and slr on the economy​

Answer 1

Answer:

The change in SLR and CRRt either increases or decreases the money supply to commercial banks. ... RBI uses Statutory Liquidity Ratio (SLR) and Cash Reserve Ratio (CRR) as a tool for the expansion or contraction of bank credit which has a direct impact on the economy upon the situation of inflation or deflation.

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Answer 2

Answer:

At the time of high inflation, the government needs to ensure that excess money is not available in the economy. To that extent, RBI increases the Cash Reserve Ratio, and the amount of money that is available with the banks reduces. This curbs excess flow of money in the economy.

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