
India’s Monetary and Fiscal Policy | 91
are long-term in nature, they are liquid as they can be traded in the secondary market.
Since 1991, as the economy has recovered and sector reforms increased, the SLR has
fallen from 38.5% to 23% over the past decade and is 18.75% in September 2019.
Bank Rate
Bank rate is the minimum rate at which the central bank provides loans to the
commercial banks. It is also called the discount rate. Usually, an increment in bank
rate results in commercial banks increasing their lending rates. Changes in bank
rate aect credit creation by banks through altering the cost of credit.
Inflation
Inflation refers to a persistent ...