MONEY&MONETARY

POLICY

BY:
Bhavana Gautam
Priyanka Srivastava
Kangkana
Surabhi Singh
Anuradha Kumari Kashyap
SomnathDash
Bikash Kumar
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!MONEY!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
 A Short History of Money
WHAT IS MONEY?????

 Early Money:-BARTER

 Symbolic Proto-Money

 More Symbolic Currency

 Egyptian Currency
500 B.C. Chinese Coins

 600 B.C. The First Coins

 Chinese Paper Money

 Paper Money in Europe

 Bank Notes

 Early U.S. Money

History Continue……….

•The Development of Banks

•The Birth of the Central Bank
•Money Through Revolution and
War
Different kinds of money!!!!!!
Coins and Paper Money

Representative Money

Fiat Money

U.S. Money
 BREIF IDEA OF MONETORY
POLICY
Related to the supply of money
Actions of the Federal Reserve Buying and selling
of seasoned
Treasury securities

Allows commercial
banks ,institutions
to make new loans
and investments

Does so with
newly created
money

This money
can serve as
reserves
 DIFFERENCE BETWEEN FISCAL AND MONETORY POLICY
•Monetary policy is typically implemented by a
central bank
•Fiscal policy decisions are set by the national
government
Increased Spending
Automatic Fiscal Program
Tax Cuts
•Monetary Policy
Manipulation of the available money supply
Alter the reserve ratio
Adjusting the federal funds rate
Concept of Monetary policy
Monetary authority
Supply of money
 Rate of growth , employment ,inflation
Announced twice a year
 Slack-season policy
 Busy-season policy
Dynamic in nature
 Expansionary

Contactionary
OBJECTIVES OF THE MONETARY
POLICY

 Maintain price stability and ensure

adequate flow of credit to the
productive sectors of the economy
 Growth in Income and Employment
 To control the inflationary pressures
generated in Economy
INSTRUMENTS OF MONETARY POLICY

Quantitative Controls
Bank Rate
Cash Reserve Ratio
Statutory Liquidity Ratio
Repo rate
Reverse Repo Rate
Open Market operation
INSTRUMENTS OF MONETARY POLICY

Qualitative Controls
Margin Requirement
Control Through Directives
Moral Suasion
Regulation Of consumer credit
Rationing Of Credit
Direct Action
HOW BANK RATE CONTROLS THE INFLATION AND DEFLATION OF A COUNTRY

LOAN TO
BANK RATE COMMERCIA PRODUCTION
L BANK

EMPLOYMEN INCOM PURCHASING

T E POWER

DEMAND PRICE

BY USING THE MONETARY TOOL GOVT. CONTROLS THE INFLATION OF THE COUNTR
HOW BANK RATE CONTROLS THE INFLATION AND DEFLATION OF A COUNTRY

LOAN TO
BANK RATE COMMERCIA PRODUCTION
L BANK

EMPLOYMEN INCOM PURCHASING

T E POWER

DEMAND PRICE

BY USING THE MONETARY TOOL GOVT. CONTROLS THE DEFLATION OF THE COUNTR
HOW OPEN MARKET OPERATION CONTROLS THE INFLATION AND DEFLATION
OF A COUNTRY

PUBLIC
GOVT.BOND SAVINGS
INVESTMEN
T
DISPOSAL PURCHASING
POWER DEMAND
INCOME

PRICE

BY USING THE MONETARY TOOL GOVT. CONTROLS THE INFLATION OF THE COUNTR
HOW OPEN MARKET OPERATION CONTROLS THE INFLATION AND DEFLATION
OF A COUNTRY

PUBLIC
GOVT.BOND SAVINGS
INVESTMEN
T
DISPOSAL PURCHASING
POWER DEMAND
INCOME

PRICE

BY USING THE MONETARY TOOL GOVT. CONTROLS THE DEFLATION OF THE COUNT
IMPACT OF MONEYTORY POLICY

 Impact of cutting in CRR on Interest rates

 Impact of change in SLR and gilt products on
interest Rates
 Impact on domestic Industry and Exporters
 Impact on Stock market and Money Supply
 Impact of money supply on Jobs, wages, and
output
THANK YOU