ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The Reserve Bank regulates financial markets within the overarching statutory framework of the Reserve Bank of India Act, 1934, the Government Securities Act, 2006, Foreign Exchange Management Act, 1999, the Bilateral Netting of Qualified Financial Contracts Act, 2020 and the Payment and Settlement Systems Act, 2007.

Detailed explanation-2: -The Function of RBI as a Regulator of the Money Market It is in charge of the country’s currency and gold reserves. The foreign exchange rate reflects the demand for and supply of foreign exchange resulting from trade and capital transactions on any given day. RBI works as a regulator of the money market.

Detailed explanation-3: -The RBI is the main body that controls the monetary policy in India. They control the flow of money into the market through various instruments of monetary policy.

Detailed explanation-4: -According to the RBI, “The money market is the centre for dealing mainly of short character, in monetary assets; it meets the short term requirements of borrowers and provides liquidity or cash to the lenders.