__________ refers to the action taken by central bank of the country to cancel the impact of its…
Sterilization offsets the money-supply effect of foreign exchange intervention. For example, a central bank can sell domestic securities to absorb liquidity created by its…
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__________ refers to the action taken by central bank of the country to cancel the impact of its foreign exchange market intervention on money supply.
Answer and explanation
Correct answer A
Sterilization offsets the money-supply effect of foreign exchange intervention. For example, a central bank can sell domestic securities to absorb liquidity created by its purchase of foreign currency.
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Maharashtra and Goa SET (MH SET)