Which of the following is not instrument if monetary policy

BANKING GENERAL KNOWLEDGE

Please wait while the activity loads.
If this activity does not load, try refreshing your browser. Also, this page requires javascript. Please visit using a browser with javascript enabled.

If loading fails, click here to try again

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

A	Bank rate
B	Open market operation
C	Selective credit control
D	Government spending

Explanation:

Detailed explanation-1: -Hence, the Call money rate is NOT an instrument of monetary policy in India.

Detailed explanation-2: -Out of the given options, deficit financing is not a monetary tool.

Detailed explanation-3: -The correct answer is option 2, i.e., MSP. MSP is NOT an instrument of RBI’s Monetary Policy.

Detailed explanation-4: -One of the most effective instruments of monetary policy is the bank rate. A bank rate is essentially the rate at which the RBI lends money to commercial banks without any security or collateral. It is also the standard rate at which the RBI will buy or discount bills of exchange and other such commercial instruments.

Detailed explanation-5: -Repo Rate: The (fixed) interest rate at which the Reserve Bank provides overnight liquidity to banks against the collateral of government and other approved securities under the liquidity adjustment facility (LAF).

There is 1 question to complete.