What does accommodative stance of RBI mean?

An accommodative stance means a central bank will cut rates to inject money into the financial system whenever needed. A change in this stance to ‘neutral’ means RBI will alter rates in any direction to control the money supply in the system.

What is accommodative stance of monetary policy?

Accommodative monetary policy is when central banks expand the money supply to boost the economy. Monetary policies that are considered accommodative include lowering the Federal funds rate. These measures are meant to make money less expensive to borrow and encourage more spending.

What are the stances of RBI?

4. Monetary Policy Stances are namely Dovish, Hawkish, Accommodative & Neutral, so that now for the upcoming RBI’s Monetary Policy Statements, you could well comprehend the meaning of these Monetary Policy Stances.

What does policy stance mean?

That stance can be defined as the contribution made by monetary policy to economic, financial and monetary developments. Thus, the assessment of the monetary policy stance can be defined as determining whether the contribution made by monetary policy actions is appropriate in view of the central bank’s objectives.

What does neutral stance mean?

adjective. If a person or country adopts a neutral position or remains neutral, they do not support anyone in a disagreement, war, or contest.

What is dovish stance?

If a Fed official is said to have a “dovish stance”, then this means that they are in favor of maintaining low interest rates in an effort to stimulate the economy. They are not particularly worried about inflation. The opposite of a dove is a “hawk”.

Is accommodative monetary policy expansionary or contractionary?

Accommodative Monetary Policy This expansionary policy of buying market assets, combined with very low interest rates, boosted stock prices as investors found it easier to borrow – as did the businesses that they invested in, who were able to expand their output for low relative cost.