Impact of Operational Decisions of RBI on Indian Economy - An Evaluation of Select Instruments.

The current economic scenario of various countries across the world are hugely suffered from the set back issues such as War incidents, global recession, downward trend of economic growth and uncertainty caused due to COVID-19. The outlook for growth and inflation are both at risk from lingering conflict and sanctions, high oil and commodity prices, protracted supply-chain disruptions, amplified global financial market volatility resulting from monetary policy changes in major economies and new COVID-19 outbreaks in India. During 2021-2022, excess liquidity conditions and the external benchmark-based pricing of variable rate loans significantly improved monetary transmission. The bulk of the industries saw an increase in interest rates on existing loans. With the support of conventional and unconventional liquidity measures, RBI has supported the banks to maintain orderly market conditions while boosting mood on the financial markets. In view of the existing scenario, the research paper critically examines the trends in instruments used by RBI to control the flow of deposits and money circulation among the banks with a main aim to reduce the negative effects of economic down turn. In this paper, an attempt is made to evaluate the impact of financial instruments of RBI on Indian Economy. The paper further examines the influence of the select instruments (i.e., Repo Rate, Reverse Repo Rate, Cash Reserve Ratio) on Inflation rate, GDP and Unemployment rate. The study is descriptive research oriented. Secondary sources of data extracted from RBI; World Bank data holds major part of the present research paper. [ABSTRACT FROM AUTHOR]