Q. Consider the following statement about the Monetary policy of India:
1. The primary objective of monetary policy is to maintain price stability while keeping in mind the objective of growth.
2. RBI has been given exclusive jurisdiction over monetary policy in India under Banking Regulation Act 1949
Which of the above statements is/are correct?
Answer: A
Notes:
About Monetary Policy
Monetary policy refers to the policy of the central bank with regard to the use of monetary instruments under its control to achieve the goals specified in the Act. The Reserve Bank of India (RBI) is vested with the responsibility of conducting monetary policy. This responsibility is explicitly mandated under the Reserve Bank of India Act, 1934.
Objective: The primary objective of monetary policy is to maintain price stability while keeping in mind the objective of growth. Price stability is a necessary precondition to sustainable growth. In May 2016, the Reserve Bank of India (RBI) Act, 1934 was amended to provide a statutory basis for the implementation of the flexible inflation targeting framework
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