Review of quantitative easing measures by Reserve Bank of India

Abstract

QE comes under the unconventional monetary policy umbrella, wherein big bang purchases of securities by central banks are made in order to stimulate lower yields, reduction in interest rates, increase money supply in the economy with the ultimate objective of improvement in credit lending to consumers and industry. In contrast with conventional monetary policy tool where short-term rates are targeted, in QE, by buying long term securities, banks moderate long term interest rates and thus, avoid going below the zero-rate bound in times of depression"