Which of the following instruments is classified as a qualitative tool of monetary policy used by central banks?

💡 Solution & Explanation

Margin requirements function as a selective or qualitative tool of monetary policy utilized by the central bank to regulate credit availability for specific economic sectors. On the other hand, instruments like the Cash Reserve Ratio, Statutory Liquidity Ratio, and Repo Rate are quantitative tools that alter the aggregate money supply and overall credit volume in the economy. Such qualitative credit controls help curb speculative hoarding of essential commodities.