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    Question

    As per the Monetary Policy Framework Agreement signed

    between the Government of India and the Reserve bank of India in 2015, what is the primary objective of the monetary policy?
    A Regulating the creation and supply of money in the economy Correct Answer Incorrect Answer
    B Maintain the repo rate, cash reserve ratio and statutory liquidity ratio for inflation targeting Correct Answer Incorrect Answer
    C Maintaining adequate foreign exchange reserves which can be beneficial in the times of economic crisis Correct Answer Incorrect Answer
    D Maintaining price stability, while keeping the objective of growth in mind Correct Answer Incorrect Answer

    Solution

    A new “Monetary Policy Framework” Agreement was signed between the Government of India and RBI in Feb 2015. As per the new monetary policy framework agreement, following are the important points: - • The objective of the monetary policy is to primarily maintain price stability, while keeping in mind the objective of growth • The monetary policy framework is operated by RBI • The inflation target is 4% with a band of +/- 2%

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