{"id":21788,"date":"2015-01-08T11:46:12","date_gmt":"2015-01-08T11:46:12","guid":{"rendered":"http:\/\/vskills.in\/certification\/blog\/?p=21788"},"modified":"2024-04-03T13:07:27","modified_gmt":"2024-04-03T07:37:27","slug":"role-of-reserve-bank-in-inflation","status":"publish","type":"post","link":"https:\/\/www.vskills.in\/certification\/blog\/role-of-reserve-bank-in-inflation\/","title":{"rendered":"Role of Reserve Bank in inflation"},"content":{"rendered":"

\"role-of-reserve-bank-in-inflation\"<\/a><\/p>\n

To understand the bank role it is necessary to know about inflation<\/p>\n

Inflation : <\/b>inflation is situation of economy\u00a0 under which prices of goods and services fall down and purchasing power of consumer fall down due to fall down value of money.<\/p>\n

Inflation has having both effects on our economy. It has positive effect as well negative effect. To recover the economy from recession inflation is require but a certain level. But when inflation increase it effect growth of\u00a0 economy.<\/p>\n

Negative effect<\/b> is that it inc price of goods which reduce the saving as well as investment of consumer. In our economy flow of capital is effected . value of money fall down. People start hoarding of goods. demand and supply are not equal. There is situation of disequilibrium in our economy.<\/p>\n

Positive effect<\/b>\u00a0 is that it wipe out debts.<\/p>\n

How\u00a0 Reserve bank \u00a0play important \u00a0role \u00a0in inflation and \u00a0move \u00a0economy towards growth?<\/p>\n

In inflation RBI raising interest rates, the RBI order to commercial banks to raise rates . As a result ,firms do not borrow as much to invest when rates are higher and individuals stop buying durable goods against credit and started \u00a0to save. Lower demand growth leads to a better match between demand and supply.<\/p>\n

RBI ensure that price don\u2019t move and encourage people to save money and create price stability.<\/b><\/p>\n

Finance stability: <\/b>RBI also play an important role in finance stability. It create balance between \u00a0\u00a0borrowing\u00a0 and deposit of money. For this purpose, it keep a specific ratio of cash \u00a0\u00a0which we known as cash reserve ratio. It ensure liquidity in the economy and proper flow of capital in economy and move economy towards growth .<\/p>\n

Click here for government certification in Accounting, Banking & Finance<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

To understand the bank role it is necessary to know about inflation Inflation : inflation is situation of economy\u00a0 under which prices of goods and services fall down and purchasing power of consumer fall down due to fall down value of money. Inflation has having both effects on our economy. It has positive effect as…<\/p>\n","protected":false},"author":722,"featured_media":22101,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_joinchat":[],"footnotes":""},"categories":[1519],"tags":[1775,1736],"class_list":["post-21788","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-accounting-banking-and-finance","tag-reserve-bank-of-india","tag-role-of-reserve-bank-in-inflation"],"acf":[],"yoast_head":"\nRole of Reserve bank in inflation<\/title>\n<meta name=\"description\" content=\"what is reserve bank of india's role ?\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.vskills.in\/certification\/blog\/role-of-reserve-bank-in-inflation\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Role of Reserve bank in inflation\" \/>\n<meta property=\"og:description\" content=\"what is reserve bank of india's role ?\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.vskills.in\/certification\/blog\/role-of-reserve-bank-in-inflation\/\" \/>\n<meta property=\"og:site_name\" content=\"Vskills Blog\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/vskills.in\" \/>\n<meta property=\"article:published_time\" content=\"2015-01-08T11:46:12+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-04-03T07:37:27+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.vskills.in\/certification\/blog\/wp-content\/uploads\/2015\/01\/role-of-reserve-bank-in-inflation.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"291\" \/>\n\t<meta property=\"og:image:height\" content=\"260\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Garima Bhateja\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Garima Bhateja\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"1 minute\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.vskills.in\/certification\/blog\/role-of-reserve-bank-in-inflation\/\",\"url\":\"https:\/\/www.vskills.in\/certification\/blog\/role-of-reserve-bank-in-inflation\/\",\"name\":\"Role of Reserve bank in inflation\",\"isPartOf\":{\"@id\":\"https:\/\/www.vskills.in\/certification\/blog\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.vskills.in\/certification\/blog\/role-of-reserve-bank-in-inflation\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.vskills.in\/certification\/blog\/role-of-reserve-bank-in-inflation\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.vskills.in\/certification\/blog\/wp-content\/uploads\/2015\/01\/role-of-reserve-bank-in-inflation.jpg\",\"datePublished\":\"2015-01-08T11:46:12+00:00\",\"dateModified\":\"2024-04-03T07:37:27+00:00\",\"author\":{\"@id\":\"https:\/\/www.vskills.in\/certification\/blog\/#\/schema\/person\/829de1ab10c326975afc352ccb7005a0\"},\"description\":\"what is reserve bank of india's role ?\",\"breadcrumb\":{\"@id\":\"https:\/\/www.vskills.in\/certification\/blog\/role-of-reserve-bank-in-inflation\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.vskills.in\/certification\/blog\/role-of-reserve-bank-in-inflation\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.vskills.in\/certification\/blog\/role-of-reserve-bank-in-inflation\/#primaryimage\",\"url\":\"https:\/\/www.vskills.in\/certification\/blog\/wp-content\/uploads\/2015\/01\/role-of-reserve-bank-in-inflation.jpg\",\"contentUrl\":\"https:\/\/www.vskills.in\/certification\/blog\/wp-content\/uploads\/2015\/01\/role-of-reserve-bank-in-inflation.jpg\",\"width\":291,\"height\":260},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.vskills.in\/certification\/blog\/role-of-reserve-bank-in-inflation\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.vskills.in\/certification\/blog\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Role of Reserve Bank in inflation\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.vskills.in\/certification\/blog\/#website\",\"url\":\"https:\/\/www.vskills.in\/certification\/blog\/\",\"name\":\"Vskills Blog\",\"description\":\"Vskills - 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