Question

what is CRR what significant role does CRR play in an economy​

Answer 1

Answer:

Explanation:

The aim here is to ensure that banks do not run out of cash to meet the payment demands of their depositors. CRR is a crucial monetary policy tool and is used for controlling money supply in an economy. CRR specifications give greater control to the central bank over money supply.

Answer 2

Answer:

CRR was introduced in 1950 primarily as a measure to ensure saftey and liquidty of bank deposit, however over the years it has become an important and effective tool for directly regulating the leading capacity of banks and controlling the money supply in the economy.