Demonetisation will reduce money supply in the economy , only way to target the accumulated cash , helps authorities to control black money. Monetory policy is the policy of central bank. It is an important tool of the macroeconomic policy and has become a very important economic policy instrument of modern welfare state , to achieve the desired changes in the size and composition of national income and employment in the economy. Monetory policy , the controller and regulator of money supply with the help of monetory instrument control and create the credit. The various macroeconomic objectives such as stablisation and economic growth in order to raise the living standards of the people which considered as social obligation , to achieve these social goals , the Govt. initiates an appropriate economic policy at national level . The growth rate of money supply in its quantitative terms effect the price rise and expose the judicious balance between price stability and growth , economic and finanacial market condition , ensuring finanacial security , strengthening the external sector. The main objective of the article is to study the contemporary issue- demonetisation of money in monetory policy in terms of the avilability of money and cost of money.
Keywords: Demonetization, Stablization, Strengthening, Welfare etc.
