BANKING AFFAIRS

Detailed explanation-1: -Notes: The instruments of monetary policy which directly affect the quantity of money supply are called as Quantitative instruments. Example: Open Market Operations Liquidity Adjustment Facility (Repo and Reverse Repo) etc.

Detailed explanation-2: -Ans. The various different tools and instruments of monetary policy are as follows: cash reserve ratio, statutory liquidity ratio, bank rate, repo rate, reserve repo rate and open market operations.

Detailed explanation-3: -And to control this, RBI implements the monetary policy’s Quantitative and Qualitative instruments to achieve economic goals. The main instruments of these policies are CRR, SLR, Bank Rate, Repo Rate, Reverse Repo Rate, Open Market Operations, etc.

Detailed explanation-4: -Quantitative easing is a form of monetary policy used by central banks to increase the domestic money supply and spur economic activity. In QE, the central bank purchases government bonds and other financial instruments, such as mortgage-backed securities (MBS).

Detailed explanation-5: -The important quantitative methods are: (a) Bank Rate, (b) Open Market Operations, (c) Cash Reserve Ratio, (d) Statutory Liquidity Ratio, (e) Repo Rate, (f) Reverse Repo Rate.