What is SLR & CRR ? CURRENT MONETARY POLICY.

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Accepted Answer

SLR and CRR are monetary policy tools used by the central bank to regulate the money supply in the economy.

SLR stands for Statutory Liquidity Ratio and refers to the percentage of deposits that banks are required to maintain in the form of liquid assets such as cash, gold, or government securities.
CRR stands for Cash Reserve Ratio and refers to the percentage of deposits that banks are required to keep with the central bank as a reserve.
Both SLR and CRR are used by the central bank to control the money supply in the economy and regulate inflation.
For example, if the central bank increases the CRR, banks will have less money to lend, which can reduce inflationary pressures.
Similarly, if the central bank reduces the SLR, banks will have more money to lend, which can stimulate economic growth.
The current monetary policy in India is focused on maintaining price stability and supporting economic growth through measures such as reducing the repo rate and providing liquidity support to banks.

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