IT will help

2. MEANING
Monetary policy is an economic policy that
manages the size and growth rate of the
money supply in an economy. It is a powerful
tool to regulate macroeconomic variables such
as inflation and unemployment
OR
Monetary policy refers to the credit control
measures adopted by the central bank of a
country.

3. Objectives or Goals
1. Full Employment
2. Price Stability
3. Economic Growth
4. Balance of Payments
5. Inflation
6. Currency exchange rates

4. Instruments
•Quantitive Instrument
• Bank Rate
• Open Market Operations
• Change in Cash reserve ratio
• Change in Selective Credit Controls

5. Qualitative Instruments
Rationing of credit
Regulation of consumer credit
Direct action
Moral suasion

6. Limitations in less developed countries
Large non monetized Sector
 Undeveloped Money and Capital Markets
o Large Number of NBFLs
 High Liquidity
Foreign Banks
Small Bank Money
• Money not deposited with Banks