meri saheli magazine

meri saheli magazine

meri saheli magazine  Published this article page no 28  In order to achieve its main objectives the Monetary Policy Committee determines the ideal policy interest rate that will help achieve the inflation target in front of the country. Monetary Policy Instruments and how they are managed? Monetary policy instruments are of two types namely qualitative instruments and quantitative instruments. The list of quantitative instruments include Open Market Operations Bank Rate Repo Rate Reverse Repo Rate Cash Reserve Ratio Statutory Liquidity Ratio Marginal standing facility and Liquidity Adjustment Facility (LAF). Qualitative Instruments refer to direct action change in the margin money and moral suasion. 2. What does RBIs $5 billion dollarrupee swap mean? Context The Reserve Bank of India (RBI) has conducted a $ 5 billion dollarrupee swap auction as part of its liquidity management initiative leading to infusion of dollars and sucking out of the rupee from the financial system. What is a Dollar–Rupee Swap auction? Its a forex tool whereby the central bank uses its currency to buy another currency or vice versa.  In a Dollar–Rupee buysell swap the central bank buys dollars (US dollars or USD) from banks in exchange for Indian Rupees (INR) and immediately gets into an opposite deal with banks promising to sell dollars at a later date. Why do Central Banks engage in it?  Forex swaps help in liquidity management meri saheli magazine buy.  


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