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Monetary Policy of India

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Select a major trading partner (COUNTRY) for the US and research if they have a CENTRAL BANK in charge of Monetary Policy just as we have the FEDERAL RESERVE in the US. Discuss the latest change this central bank made to interest rates in that country and briefly discuss why. Comment on peers' responses. Make sure your main response is accurate, clear and substantive.

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Response discusses the Monetary Policy of India

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Select a major trading partner (COUNTRY) for the US and research if they have a CENTRAL BANK in charge of Monetary Policy just as we have the FEDERAL RESERVE in the US. Discuss the latest change this central bank made to interest rates in that country and briefly discuss why. Comment on peers' responses. Make sure your main response is accurate, clear and substantive.

Monetary policy is a policy regulated by country's central bank. There are three tools of monetary policy: open market operations, changes in reserve requirements, and changes in the discount rate. Central bank can expand the money supply by:
? Reducing the discount rate
? Reduction in reserves requirements
? Purchasing the Bonds
Central bank can contract the money supply by:
? Increasing the discount rate
? Increasing reserves requirements
? Selling the Bonds

(Cliffnotes, 2009)
Monetary Policy of India
Monetary policy of India is regulated by RBI. The Reserve Bank of India was established on April 1, 1935 in accordance with the provisions of the Reserve Bank of India Act, 1934. As per nipfp, ...

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