What are the measures taken by RBI to control inflation in india?

Question

The steps already taken when the inflation started increasing?

Answer 1

they are generally in the form of CRR and Repo rate controls.

Answer 2

hi,

in simple terms they reduce the cash flow in market by increasing interest rate and reducing bank loans.

less cash in the market reduces the inflation.

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Answer 3

The Reserve Bank of India has raised repo rate by 50 basis point to 9 per cent from the existing 8.5 per cent. This short-term rate at which the RBI lends cash to banks was last raised on June 24 by 50 basis points to 8.5 per cent.  The move is directed at cooling inflation that is running at nearly 12 per cent on an annual basis by containing demand.

The central bank has also raised the CRR ( percentage of banks' deposits which they must keep with the central bank) by 25 basis points from the existing 8.75 per cent. This will come into effect from August 30.

The reverse repo rate ( The short-term rate at which the central bank absorbs cash from the market) remains unchanged at 6 per cent. It has also held the Bank Rate (rates used to price long-term loans to firms and individuals) steady at 6.0 per cent.

In the Quarterly Review of the Monetary Policy, Governor YV Reddy has given high priority to price stability, anchoring inflation expectations and orderly conditions in financial markets. This while sustaining the growth momentum.  

Answer 4

Rate hikes are being taken by the RBI to control inflation.