Discuss any two methods by which Reserve Bank of India can regulate money supply
Dear student
The two methods by which Reserve Bank of India can regulate money supply are:-
1. REPO RATE:- repo rate is the rate at which the central bank of a country lends money to commercial banks in the event of any shortfall of funds.it is used by monetary authorities to control inflation.
2.OPEN MARKET OPERATIONS:- It refers to sale and purchase of securities in the open market by the central bank.it directly influence the flow of money supply.
Regards
The two methods by which Reserve Bank of India can regulate money supply are:-
1. REPO RATE:- repo rate is the rate at which the central bank of a country lends money to commercial banks in the event of any shortfall of funds.it is used by monetary authorities to control inflation.
2.OPEN MARKET OPERATIONS:- It refers to sale and purchase of securities in the open market by the central bank.it directly influence the flow of money supply.
Regards