Phase IFoundation
Background
Overview
Understanding how the RBI uses its primary tools like the repo rate and its policy stance to manage macroeconomic variables (inflation, growth, liquidity) is fundamental for GS3 (Indian Economy).
Monetary policy refers to the actions undertaken by a central bank to influence the availability and cost of money and credit to help promote national economic goals. The repo rate is a key policy instrument, representing the rate at which the central bank lends money to commercial banks.