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RBI to conduct open market operation under G-SAP 2.0

  • Published
    21st Aug, 2021

Apart from managing the liquidity in the economy, RBI’s monetary policies also affect borrowing costs for the government. Elaborate. (150 words)

Approach:

  • Introduce by giving a simple definition of Monetary Policy
  • Briefly describes various instruments used by RBI for implementing its monetary policy
  • Describe how RBI affects costs of borrowing for the government by changing market interest rates and managing the yield curve by acquiring G-secs.
  • Conclude by briefly describing recent RBIs actions that have affected the cost of borrowings for the government.
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