It is an important economic tool for achieving the economic goals of a nation. It is generally laid down and operated by the central bank of the country in consultation with the government. In our country, monetary policy is determined and operated by Reserve Bank of India.
Monetary policy plays an important role in moulding the economic character of a country. A properly conceived monetary policy can facilitate to a great extent the economic growth of a country by adjusting the money supply to the needs of growth by directing the flow of funds into the desired productive channels.