ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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What Is Monetary Policy Doing?

What Is Monetary Policy Doing?

The Reserve Bank of India has been using open market operations to sterilise the inflows of foreign capital so as to contain domestic monetary expansion. At the same time it is intervening in foreign exchange markets. With downward price rigidity, and shocks such as declining foreign interest rates, and declining import tariffs as the economy integrates into the world economy, it is imperative to revise the money supply target so as to enable the economy to adjust to these shocks better.

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