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Monetary policy, implemented by the Reserve Bank of India (RBI), aims to control money supply, interest rates, and liquidity to ensure economic stability. It includes expansionary and contractionary policies, utilizing various quantitative and qualitative tools such as Cash Reserve Ratio, Repo Rate, and guidelines for credit flow. Limitations of monetary policy include its ineffectiveness against supply-side inflation, black money, and imported inflation, necessitating complementary fiscal interventions.
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