Influencing the cost of debts and liquidity by changing interest rates and money supply is called monetary policy.
Quantitative and qualitative monetary instruments are the two main instruments used to operate the monetary policy.
Quantitative credit control instruments are the common methods of reducing the supply of loans. The volume of loans and the direction of the flow of the loans are controlled by the qualitative credit control instruments.
Quantitative monetary instruments are of three types such as Bank interest rate, statutory reserve ratio and open market operations.
Policy interest rates are:
Bank interest rate.
Repurchasing rate.
Reselling rate.
Among them repurchasing rate and reselling rate are used in the open market operations.
Qualitative credit control instruments are of various types:
