Monetary policy is controlled by 

The correct answer is Central Bank.Key Points

• The central bank of India which regulates the monetary market in India is Reserve Bank of India.
• Monetary Policy refers to the use of monetary instruments under the control of the central bank to regulate magnitudes such as interest rates, money supply, and availability of credit with a view to achieving the ultimate objective of economic policy.
• The Monetary Policy Committee (MPC) constituted by the Central Government under Section 45ZB determines the policy interest rate required to achieve the inflation target.
• The primary objective of monetary policy is to maintain price stability while keeping in mind the objective of growth. Price stability is a necessary precondition to sustainable growth.
• The Reserve Bank of India (RBI) is vested with the responsibility of conducting monetary policy. This responsibility is explicitly mandated under the Reserve Bank of India Act, 1934.
• Monetary policy is RBI's initiative to achieve price stability, financial stability, and adequate availability of credit for growth.
• It is also used to manage economic growth, unemployment, and inflation.
• Objectives of Monetary Policy:
  • To regulate the money supply in the economy.
  • To attain price stability of money in the market.
  • To promote economic growth and development.
  • To maintain the neutrality of money.
  • To promote employment.
• Monetary policies include Bank Rate, Cash Reserve Ratio (CRR), Statutory Liquidity Ratio (SLR), Repo Rate, Reverse Repo Rate, and Open Market Operations.

Additional Information 

• Reserve Bank of India (RBI):
  • RBI was set up on the basis of the Hilton Young Commission recommendation in April 1935, with the enactment of the RBI Act, 1934.
  • Its first Governor was C.D. Deshmukh.
  • The headquarters of RBI is in Mumbai.
  • Current Governor is Shaktikanta Das. (As of Aug 2022)