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MONETARY POLICY
What is the primary objective of monetary policy as mandated under the RBI Act, 1934 (amended 2016)?
The primary objective is to maintain price stability while keeping in mind the objective of growth, with the inflation target set by the Central Government in consultation with RBI.
What is the primary tool used by RBI to signal its monetary policy stance to the market?
The policy repo rate is the primary signalling tool.
What is the current inflation target set for RBI under the flexible inflation targeting framework?
The inflation target is 4% (CPI-based) with a tolerance band of +/- 2%, meaning RBI aims to keep inflation between 2% and 6%.
What is the Weighted Average Call Rate (WACR) and why is it significant for monetary policy?
WACR is the overnight interbank rate; it is the RBI's operating target.
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