Economy Important Topics for UPSC CSE Prelims

Economy Important Topics for UPSC CSE Prelims
Economy Important Topics for UPSC CSE Prelims  RBI Functions & Monetary Policy - Core functions of RBI : Issuer of currency, regulator of monetary policy, supervisor of payment systems, manager of foreign exchange reserves, banker to the government and banks. - Monetary Policy Tools :   - Quantitative: CRR, SLR, Repo Rate, Reverse Repo Rate, MSF, SDF, OMOs (Open Market Operations).   - Qualitative: Moral suasion, credit rationing, margin requirements. - Monetary Policy Committee (MPC) :   - Composition (3 RBI members + 3 government nominees).   - Mandate: Inflation targeting (4% ± 2% under the amended RBI Act, 2016).   - Meetings and decision-making process. - Expansionary vs. Contractionary Monetary Policy :   - Transmission mechanisms (policy rate → lending rates → demand → inflation). - RBI as Lender of Last Resort : Liquidity support to banks (e.g., during crises). - Banker to the Government : Management of public debt and government accounts. - Exchange Rate Management :   - Forex intervention (pu…