ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The Reserve Bank of India (RBI) controls the money supply in India. The RBI has control over the monetary policy of India. It controls the interest rates, the reserves to be maintained with the banks to control the money circulation in the economy.

Detailed explanation-2: -The monetary policy is a policy formulated by the central bank, i.e., RBI (Reserve Bank of India) and relates to the monetary matters of the country. The policy involves measures taken to regulate the supply of money, availability, and cost of credit in the economy.

Detailed explanation-3: -Central banks conduct monetary policy by adjusting the supply of money, usually through buying or selling securities in the open market. Open market operations affect short-term interest rates, which in turn influence longer-term rates and economic activity.

Detailed explanation-4: -The RBI is the main authority for the monetary policy of the country. The main functions of the RBI are to maintain financial stability and the required level of liquidity in the economy. The RBI also controls and regulates the currency system of our economy. It is the sole issuer of currency notes in India.

Detailed explanation-5: -Reserve Bank of India-Data on Money Supply.