Objectives of Monetary Policy in India

The main aim of the monetary policy of the Reserve Bank is to control the money supply in such a manner as to expand it to meet the needs of economic growth and at the same time contract it to curb inflation. In other words, monetary policy is aimed at expanding and contracting money supply according to the needs of the economy.

Main Objectives of the Monetary Policy

• To regulate money supply in the economy
• To attain price stability
• To promote economic growth
• To promote saving and investment
• To control business cycles
• To promote exports and substitute imports
• Others: To manage aggregate demand; to ensure more credit for priority sector; to promote employment; to develop infrastructure; to regulate and expand banking; instruments of monetary policy.