What is Monetary Policy and the role of Reserve Bank of India (RBI)?

Monetary Policy & RBI's Role:

• Definition: Macroeconomic policy formulated by RBI's Monetary Policy Committee (MPC) to control money supply, interest rates, and inflation (target 4% ± 2%).
• Quantitative Tools: Repo Rate, Reverse Repo Rate, Cash Reserve Ratio (CRR), Statutory Liquidity Ratio (SLR), and Marginal Standing Facility (MSF).
• Qualitative Tools: Moral Suasion, Margin Requirements, Credit Rationing.