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Introduction
Monetary policy is an important constituent of overall economic policy towards the pursuit of various economic goals, including expansion of employment, higher economic growth, and maintenance of price stability. Over the past century, the prominence of monetary policy has been on a steady rise, and presently, hardly a day goes by without some mention of monetary policy appearing in the headlines. Economists and market analysts are making considerable efforts towards continuous speculation about the likely future actions of the monetary authorities across the matured and the emerging economies. With development of a broad based financial market in India and greater integration with the rest of the world, monetary policy has assumed increasing significance in recent years. Banking sector plays a critical role in transmitting monetary policy action to spending decisions of consumers and investors, and ultimately affecting output and prices. Monetary policy, which involves regulation of money stock or short term interest rate, affects various kinds of economic and financial decision making, such as purchase of a house, car or consumer durables; starting up or expanding a business; investment in a new plant or equipment through its influence on cost and quantum of credit. Through its impact on the spending decisions of the public on goods and services, monetary policy imparts its influence on aggregate demand, and thus, on output and prices. Given the importance of banks in transmission of monetary action to spending decisions, and ultimately achieving the final objectives of economic growth and price stability, the present paper attempts to present the working of monetary policy to bankers and general public.

April-June, 2008

Monetary Policy of the Central Bank: Simplifying the Mystique

Amaresh Samantaraya*
Recently, Dr. Y.V. Reddy, Governor, Reserve Bank of India (RBI) has highlighted greater challenges for monetary policy communication in a market oriented environment in India at present in view of the stakeholders becoming larger and wider and the monetary policy by itself assuming increasing complexity in terms of operating framework and instruments (Reddy, 2008). There is an increasing recognition of the importance of market expectations and public perceptions enhancing monetary policy effectiveness. In this perspective, the present paper attempts to promote better public understanding and seeks to answer what is it that the monetary authorities do, and how they do it?

*Assistant Adviser, Monetary Policy Department, Reserve Bank of India, Mumbai. The views expressed in the paper are strictly personal. Errors and omissions, if any, are the sole responsibility of the author. The usual disclaimers apply.

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April-June, 2008 bankers use the word 'money' in a more specific sense. For them, 'money' is the set of assets in the economy that is used regularly by the people to purchase goods and services from other people conveniently. The cash in our wallet is money because we can use it to buy a meal at a restaurant or a shirt from a store. Similarly, bank deposits against which cheques are drawn are as good as cash and can be treated as 'money'. However, other forms of assets such as a building or a car are not considered as money, because we cannot buy a meal or shirt with this form of assets without selling those for cash. Technically, two forms of money stock viz. (i) narrow money, and (ii) broad money are widely used in the discussion of monetary policy. The measure of narrow money includes currency in circulation plus demand deposits (current account and other chequeable deposits) in the economy. Broad money includes time deposits (fixed deposits) in addition to constituents of narrow money. In India, narrow money and broad money are denoted as M1 and M3, respectively. RBI (1998) provides detailed discussion on the conceptual and methodological issues related to monetary aggregates in India. In this backdrop, let us now discuss the broad outline of monetary policy framework and sequence of steps involved in the conduct of monetary policy (Exhibit 1).

The rest of the paper presents the monetary policy framework in general, broadly outlines the salient features of conduct of monetary policy in India, and guides how to read/interpret the monetary policy statements as announced by the RBI Governor. Glossary of terms related to conduct of monetary policy in India is presented in the Appendix.

Broad Monetary Policy Framework

The role of monetary policy, across the countries, has seen a fundamental transformation over time. In the recent decades, there is a definite trend towards making monetary policy more and more sensitive to the objectives of attaining and maintaining output and price stability. In view of greater integration of financial market both at home and across the geographical boundaries, the objective of ensuring financial stability is also gaining increasing importance. Monetary policy involves regulation of money stock or the short term interest rate to attain monetary policy objectives such as stabilization of output and prices. The responsibility for the conduct of monetary policy generally rests with the central bank of the country, as it enjoys considerable control on regulation of money stock through its monopoly over issue of currency, and creation/ destruction of bank reserves. In Indian context, the Reserve Bank of India is the monetary authority in addition to its other responsibilities including regulation and supervision of the banks, government debt management, banker to government, foreign exchange management. As 'money' plays an important role in monetary policy, we shall start with discussing what 'money' is. When we say some have a lot of money, we basically mean that they are so rich that they can buy almost anything they want. In this sense, 'money' refers to 'wealth'. However, economists and central

Exhibit 1: Framework of Monetary Policy

Reserve Requirements Standing Facilities & Central Bank Refinance Rates Open Market Operations (including Repo) Moral Suasion

Instruments

Operating Targets

Bank Reserves Short-term Money Market Rates

Intermediate Targets

Monetary/Credit Targets Long-term Interest Rates Foreign Exchange Rate

Objectives

Price Stability Output/Employment Financial Stability

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In the conduct of monetary policy, the ball rolling starts with preparing the set of objectives desirable to be achieved through monetary policy actions. In general, the list of monetary policy objectives includes price stability, output/employment augmentation, and financial stability including ensuring comfortable balance of payments conditions. Country specific conditions as also evolving macroeconomic environment in an economy determine emphasis on either of these objectives. In the theoretical plane, there has been a debate on assigning single or multiple objectives to monetary policy (Rangarajan, 2002). Another related issue pertains to conflict among few objectives. Arguments in favour of single objective are in terms of clarity of the goal, ensuring commitment of the central bank to achieve this goal and enabling the public to evaluate the success of the central bank in terms of a single yardstick. Timbergen's 'assignment rule' implies that the instrument of monetary policy should pursue a single objective of price stability which is most suitable for it. On the other hand, pursuing single objective is critricised on the grounds that it encourages conservatism on the part of the central bank and gives rise to policy bias towards low inflation, which might be sub-optimal from the point of view of economic growth and social welfare. By now, a consensus has emerged in the case of industrially advanced countries that monetary policy is best suited to pursing the goal of price stability. Many countries, beginning with New Zealand and followed by a sizeable number of countries both advanced and emerging, have also gone for direct targeting of inflation, so that a single objective of monetary policy get entrenched into their economic system as a public commitment of the central bank. Central banks in these countries have been given necessary autonomy to wield sufficient independence and flexibility over the management of interest rates and money supply towards fulfilling the 'inflation target'. However, due to several considerations, inter alia, low level of market integration, high susceptibility of the economy to domestic and external shocks, lack of conclusive evidence supporting the claim of long run growth neutrality of monetary policy and the very measurement of potential output, many developing and emerging economies prefer pursuing multiple objectives. To emphasize, the first step in the formulation of monetary policy involves clearly defining its objectives, and necessary balancing in case of multiple objectives. Depending on the macroeconomic environment and global developments, the objectives are quantified in terms of inflation rate or output/employment growth (say 2 or 5 per cent).

April-June, 2008

However, it is most important to note that the final objectives of monetary policy as discussed above are not under its direct control in most cases. Hence, the monetary authority has to rely on appropriate 'intermediate targets'. The choice of 'intermediate target' is largely based on its close and predictable link with the final objectives as well as ability of the monetary authority to exercise reasonable control over it. Generally, money stock measures, foreign exchange rate and interest have been used as intermediate targets by various central banks depending on the country specific situation. Depending on the objectives to be achieved as set in quantitative terms, consistent level/rate of intermediate target is arrived at. For example, appropriate growth rate of money stock consistent with achieving particular inflation rate and output growth rate is derived from the money demand equation. RBI (1985) provides the technical details of the related exercise. After estimating the desired level/rate of intermediate targets, the operating procedure of monetary policy tactically decides the appropriate 'operating target' and the set of policy instruments, the mode and frequency of their use and related issues in order to influence the 'intermediate target', accordingly. As a first step, the desired level (rate) of the 'operating target' is arrived at based on the estimates of the desired level of 'intermediate target'. World over, monetary base particularly, bank reserves and short term money market rates are used as the 'operating targets'. The relationship between money stock and bank reserves are derived from the 'money multiplier' equation (for details please see RBI, 1985). Similarly, as medium term interest rates consist of a series of short term interest rates over time, current short term interest rate (operating target) combined with information on expected future short term interest rates influence the shape of medium term interest rates (intermediate target). Variation of interest rates also influences foreign exchange rate (another intermediate target) through its impact on cross-border capital flows. Subsequently, the task at hand boils down to employing the appropriate set of policy instruments in order to achieve the desired level for the operating target. Traditionally, instruments in the form of standing refinance facilities and statutory reserve requirements have been very useful in liquidity management. In recent times, an array of indirect instruments such as open market operations (OMO) including repo transactions in domestic securities, foreign exchange swaps find wide application. These monetary policy instruments alter the liquidity conditions in the system and accordingly influence operating targets such as bank reserves or short term interest rates in the desired manner.

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April-June, 2008 based on central bank credibility reinforces policy effectiveness. Moreover, imprudent behavior of the banking sector which pose threat to financial stability, as evident in the recent global financial turmoil triggered by the 'subprime' crisis in the United States, may be inimical to softlanding in terms of ultimate effect of monetary policy on output and prices.

For example, open market purchase of government securities injects liquidity in the banking system, and thus, augments banks' deposits with the central banks (bank reserves) and reduces short term interest rates. Estimation of appropriate amount of liquidity injection to influence the operating targets precisely is a very challenging task for the monetary authority. Thus, as depicted in Exhibit 1, policy induced changes in the instruments result in desired changes in appropriate operating and intermediate targets, which ultimately leaves its impact in achieving the final objectives. Various dimensions of monetary policy operations vary across the countries depending upon the structure of the economy, institutional arrangements and level of development of the financial sector. Within a country also, these parameters have experienced steady transformation and modification over time with changing economic environment. There is also considerable variation in the decision making process across the central banks. In countries such as Australia, Canada, India, Israel and New Zealand, the Governor of the central bank solely take monetary policy decisions in terms of variation of policy instrument. The Governor, of course, receives suggestions and advices formally or informally for facilitating informed judgment. On the other hand, in Brazil, the Euro Area, Korea, Sweden, the United Kingdom and the United States, a 'monetary policy committee' takes collective decision on monetary policy. Patra and Samantaraya (2007) provide a comprehensive account of monetary policy decision making in select central banks covering both matured and emerging economies. Day-to-day liquidity management decisions, however, rests with a committee/group at senior/middle management level or at department level responsible for market operations. Banks play a very important role in monetary policy operations. Monetary policy instruments essentially influence liquidity conditions in the system and resultant variation in bank reserves defines the taking off for the monetary policy flight. Interest rate in the inter-bank money market is the focal point of central bank liquidity operations. Now, variation in bank reserves and short term interest rate set the tone for medium term interest rate, which in turn affects spending decision for housing, consumer durables, expanding production facilities or working capital requirements. Here also, banks' decision on lending rates based on the signals from the monetary authority (in the form of variation of bank reserves or policy rates) critically influence spending decisions, and shapes strength of monetary policy altitude of the flight. Of course, suitable expectation formation by the market and public in general

Monetary Transmission Mechanism

The monetary transmission mechanism delineates the process through which monetary policy shocks (actions) administered through changes in policy instruments and operating targets influence the final objectives. It describes the nature and strength of the influence of monetary action and the related lag structure of the effects. The lag structure comes into picture, as monetary action affects final objectives after certain time lags, generally after 6 to 24 months. The analysis of monetary transmission mechanism is crucial for the conduct of effective monetary policy and its importance cannot be overemphasized. In the standard textbook approach, tight monetary policy characterized by increase of short term interest rate raises medium term interest rates and dampens aggregate demand through curtailing investment and consumption spending. This puts downward pressure on output and prices. The propagation of monetary impulses through the interest rates as explained above is known as monetary transmission through 'interest rate channel'. In an open economy with free capital mobility, the monetary shocks affect aggregate demand through the channel of 'foreign exchange rate' also. Increase in interest rate augments international capital inflow, which in turn causes appreciation of domestic currency. This makes exports more costly and imports cheaper compressing 'exports over imports' and thus, reducing aggregate demand. Similarly, with developed financial market, variation in interest rate affects asset prices, which in turn affects aggregate demand explained by wealth effect and Tobin's 'Q' (asset price channel). Furthermore, through the impact of monetary policy on net worth of firms (balance sheet channel) and on bank deposits and credit (bank lending channel), the 'credit channel' comes into picture. Mishkin (1996) provides schematic descriptions of working of the individual channels of monetary transmission.

Conduct of Monetary Policy in India

As discussed in the previous section, objectives, targets and instruments of monetary policy evolve over time, keeping pace with changes in the structure of the economy, institutional arrangements and development of the financial sector. This is true in case of India also. The preamble to

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Reserve Bank of India Act, 1934 sets out the broad outline of the objectives as, "to regulate the issue of Bank notes and keeping of reserves with a view to securing monetary stability in India and generally to operate the currency and credit system of the country to its advantage". As enunciated in various policy documents of the Reserve Bank, inflation control and expansion of bank credit to support economic growth constituted as the dominant objectives of monetary policy in India. Relative emphasis was placed on either of them based on the prevailing economic conditions. With development of a broad-based financial market with closer global inter-linkages, 'financial stability' is included as another important objective of monetary policy in India, in the recent period. From historical perspective, in the evolving process of conduct of monetary policy in India, a sequence of phases can be clearly discernable, although some overlapping across the phases cannot be ruled out. Monetary policy in the form of 'credit planning' regulating the quantum and distribution of credit flow to various sectors of the economy in consonance with national priorities and targets assumed greater importance since adoption of philosophy of 'social control' and nationalization of banks in late 1960s. However, the policy regime was severely constrained by heavily regulated regime consisting of high level of deficit financing, priority sector lending, administered interest rates and primitive financial sector. In the backdrop of the above impediments, Chakravarty Committee (RBI, 1985) comprehensively reviewed the functioning of the monetary and banking systems and guided far-reaching transformation in the conduct of monetary policy in India. As recommended by the Chakravarty Committee, 'monetary targeting with feedback' was introduced as the basic framework of monetary policy. As discussed in the previous section, this framework suggested desirable growth of money stock consistent with output and inflation objectives of the RBI. Several reform initiatives and institutional changes as part of the comprehensive reforms introduced since early 1990s further strengthened the scope of monetary policy operations. These initiatives included development and deepening of key segments of the financial market, phasing out automatic monetization of government deficit through issue of ad hoc Treasury Bills, freedom to banks in determination of lending and deposits rates except a couple of segments, adoption of prudential norms in alignment with global best practices towards enhancing financial stability. By the late 1990s, ongoing financial openness and sweeping changes in the financial sector reoriented the role of interest rates vis--vis the quantity variables. It was felt that

April-June, 2008

in the evolving situation, while money aggregates (M3) still acts as an important indicator, information pertaining to other monetary and financial indicators should also be taken into account while formulating monetary policy. Since April 1998, the Reserve Bank formally adopted a 'multiple indicator' approach in which information on interest rates, monetary aggregates, credit, capital flows, inflation, exchange rate, etc., are pooled together for drawing policy perspectives. Thus, in this new framework, information content of all these indicators are monitored for assessing the overall macroeconomic environment and evolving global development. Based on this assessment and projection of inflation and output growth for the ensuing year, appropriate monetary policy stance is framed, including with regard to flow of bank credit. In the recent years, a consideration for financial stability in terms of quality of bank credit is also an important input for the evolving policy stance. Consistent with the stance, appropriate liquidity is maintained in the system so that adequate/legitimate requirements of credit are met. During economic slowdown and subdued inflation, the policy stance generally emphasizes adequate flow of credit to augment consumer and investment spending. On the contrary, in situations of high inflation and overheating economy, the stance stresses on limiting credit flow only to meet the legitimate requirements such as supporting investment and export demands. In alignment with the policy stance, the RBI undertakes active demand management of liquidity through open market operations (OMO) including market stabilization scheme (MSS), liquidity adjustment facility (LAF) and recourse to variation in cash reserve ratio (CRR). Particularly, as a response to unprecedented international capital inflows in recent years, there has been greater reliance on MSS and CRR to withdraw liquidity which are of the enduing nature. LAF basically addresses temporary liquidity requirements. More details of these instruments are presented in the Appendix. Ultimately, these instruments attempt to withdraw/inject liquidity in the banking system and thus, shrinks/enhances the credit creating capacity of banks so as influence investment and consumer spending as per the policy stance.

How to Read RBI's Monetary Policy Statement

The Governor of RBI announces the Annual Policy Statement in the month of April every year for the corresponding financial year followed by First Quarter, Mid-term and Third Quarter Reviews, generally, in the month of July, October and January, respectively. Our discussion in this section would be limited to the Governor's Statement on monetary policy. It consists of three sections. Section I reviews and assesses

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April-June, 2008 Statement 2005-06 puts the stance of monetary policy in terms of "provision of appropriate liquidity to meet credit growth and support investment and export demand in the economy while placing equal emphasis on price stability." On the other hand, stance in the Mid-term Review of Annual Policy Statement 2005-06 was "consistent with emphasis on price stability, provision of appropriate liquidity to meet genuine credit needs and support export and investment demand in the economy." The second statement clearly assigns a higher weight for the objective of price stability and focuses on meeting genuine credit requirements signifying relative withdrawal of accommodations. Finally, Section III of the statement on monetary policy enumerates specific policy measures in terms of variation in the Bank Rate, reverse repo/repo rates under LAF, CRR, etc. reflecting the actions undertaken in alignment with the monetary policy stance.

the evolving macroeconomic and global developments in terms of a stock-taking of output and inflation scenario followed by a brief review of monetary and credit growth along with the determining factors. Given the influence of government borrowing on market interest rates and credit behaviour of banks, likely outturn of the government borrowing requirements are assessed. Behaviour of the key segments of the financial market, namely money market, government securities market, equity market and corporate bonds market are also highlighted. Over the years, India's linkages with the rest of the world have been increasing both in terms of trade and financial flows. In view of this, Section I summarizes performance of imports and exports, behaviour of the current and capital account, and the movement of exchange rates as also highlights developments in the global economy counting performance of world output, prices, state of the global financial system and monetary policy stance of major economies. In the backdrop of the macroeconomic assessment and taking into account emerging economic scenario, the overall monetary policy stance is presented in Section II. Based on the projections of output growth and inflationary outlook, appropriate growth of money supply is projected while taking on board demand for bank c re d i t f ro m d i ff e re n t sectors, likely growth of currency and deposits, and borrowing requirement of the government. Conceptual and theoretical issues relevant to formulation of monetary policy stance are also touched upon. Appropriate nuances are used to explain the policy stance so that the underlying conditions are reflected. For example, Annual Policy

Conclusions
The present paper attempted to explain, in simple terms, the working of monetary policy in India with the objective of making it understandable for the bankers and general public. Without much technical vigor, emphasis was on explaining conduct of monetary policy in simple language. Better understanding of the importance and content of policy announcements by the bankers and general public would facilitate improvements in picking up the policy signal appropriately and correct expectation formation. As noted by Mohan (2005), the effectiveness of monetary policy will crucially depend on how well the public and market participants understand the central bank signals.

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Appendix: Glossary of Terms Bank Rate

April-June, 2008

Bank Rate is the rate of interest at which the Reserve Bank is prepared to buy or rediscount bills of exchange or other commercial papers eligible for purchase under the RBI Act, 1934. With raising or lowering of the Bank Rate, the cost of borrowing from RBI for the banks becomes dearer or cheaper. Thus, it serves as a signal to the market and business community about tight or easy monetary policy. The Bank Rate was reactivated as the central bank signaling rate since April 1997 by linking it to various rates of refinance. With emergence of repo/reverse repo rates under LAF as the effective signaling rates, refinance facilities are gradually de-linked from the Bank Rate.

Call Money Rate

'Call money rate' is the rate of interest at which commercial banks borrow from one another on an overnight basis without recourse to any collateral. Inter-bank call money market enables banks to bridge their short-term liquidity mismatches arising out of the day-to-day operations. At present, in addition to banks, primary dealers (PDs) are also eligible to participate in the call money market in India. This is the first and foremost link in the transmission of monetary policy action. Through its monopoly power over supply of bank reserves, the RBI is able to influence 'call money rate' which in turn acts as a signal for other market rates. With liquidity management operations, the RBI endeavours to keep the 'call money rate' is generally moves within the corridor formed by the reverse repo rate/repo rate under the LAF.

CRR
Cash reserve ratio (CRR) is a legal obligation on scheduled commercial banks to maintain certain reserves in the form of cash with the RBI. CRR is required to be maintained as average daily balance on a fortnightly basis, as a proportion to their respective net demand and time liabilities (NDTL). By variation of CRR, the RBI injects or withdraws liquidity by releasing reserves to or sucking reserves from the banking system. In the post-reform period, the medium term policy was to gradually reduce CRR to its statutory minimum. But, in response to unprecedented surge in foreign capital inflows, CRR was reactivated since December 2006 as a monetary policy instrument in the sterilisation process. Presently, CRR is set at 9.0 per cent.

GDP
Gross domestic product (GDP) is a commonly used indicator measuring aggregate economic activity in an economy. It measures the value of all final goods and services produced within an economy during a given period of time, in general, in a year. With some adjustment with regard to depreciation and net factor income from abroad, it represents the national income.

LAF
Liquidity Adjustment Facility (LAF) of the RBI is a mechanism, instituted in June 2000, which enables banks to mitigate their short-term mismatches in cash management on a daily basis with RBI. The LAF operates through daily reverse repo and repo auctions on a fixed rate basis that sets a corridor for the inter-bank call money rate. When the market is in a surplus liquidity mode, the RBI encourages banks to place liquidity with it through reverse repo operations against the sale of government securities with an agreement to buy it back. On the other hand, in tight liquidity conditions, RBI injects liquidity through repo operations by purchasing government securities. At present, both reverse repo and repo are on overnight basis. LAF enables RBI to modulate short term liquidity under varied financial market conditions in order to ensure stable interest rates in the overnight money market. Presently, reverse repo rate and repo rate under LAF are placed at 6.0 per cent and 9.0 per cent, respectively.

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MSS

April-June, 2008

In the wake of very large and continuous capital inflows and the need for modulating surplus liquidity conditions of enduring nature, the market stabilisation scheme (MSS) was introduced in April 2004 to equip the RBI with an additional instrument of liquidity management. Under the MSS, Treasury Bills and dated securities of the Government of India are issued. Money raised under the MSS is held in a separate identifiable cash account maintained and operated by the Reserve Bank and the amount held in this account is appropriated only for the purpose of redemption and/or buyback of the Treasury Bills and/or dated securities issued under the MSS. However, the cost of market stabilization bonds issued under MSS is borne by the Government of India. MSS securities are also traded in the secondary market, at par with the other government stock

OMO
Open Market Operations (OMO) involves buying and selling of government securities by the RBI to regulate the liquidity in the banking system. By purchasing (selling) government securities from (to) banks, the Reserve Bank enhances (tightens) liquidity in the market. As compared to repo operations under LAF, outright OMO has a relatively enduring impact on market liquidity.

SLR
Statutory liquidity ratio (SLR) is a legal obligation on banks to invest a certain proportion of their liabilities (NDTL) in specified financial assets including cash, gold and government securities. Variation of SLR alters demand for bank reserves, and hence, has an impact on the growth money and credit in the economy. This also facilitates smooth government borrowing, while promoting soundness in the banking system by ensuring sizeable investment in safe assets. At present, SLR is placed at 25 per cent.

WPI
The wholesale price index (WPI) in India captures general price movements on weekly basis for all trade and transactions. It is published with the shortest possible time lag of two weeks. It is widely used as a proxy to measure the general price inflation in the economy. The current series of WPI with 1993-94 as base year was introduced in April 2000.

References
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. Mankiw, N. Gregory (1998): Principles of Economics, Dryden Press. Michael Debabrata Patra and Amaresh Samantaraya (2007): Monetary Policy Committee: What Works and Where, RBI Occasional Papers, Vol.28, No.2, PP.1 26. Mishkin, Frederic S. (1996): The Channels of Monetary Transmission Mechanism: Lessons for Monetary Policy, NBER Working Paper No. 5464. Mohan, Rakesh (2005): Communications in Central Banks: A Perspective, RBI Bulletin, October, PP. 911 919. Rangarajan, C. (2002): Leading Issues in Monetary Policy, Bookwell, New Delhi. Rangarajan, C. and B.H. Dholakia (1979): Principles of Macroeconomics, Tata McGraw-Hill Publishing Company Limited, New Delhi. RBI (1985): Report of the Committee to Review the Working of the Monetary System (Chairman: S. Chakravarty), Reserve Bank of India, Mumbai. RBI (1998): Report of the Working Group on Money Supply: Analytics and Methodology of Compilation (Chairman: Y.V. Reddy), Reserve Bank of India, Mumbai. RBI: Annual Report, various issues. Reddy, Y.V. (2008): The Virtues and Vices of Talking about Monetary Policy: Some Comments, RBI Bulletin, July, PP. 1117 1125. Samantaraya, Amaresh (2003): Transmission Mechanism and Operating Procedure of Monetary Policy in India, Ph.D. Thesis submitted to the University of Hyderabad.

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