The Repo and Reserve Repo rates are resorted to by the RBI as a tool of
Under the Liquidity Adjustment Facility (LAF), the Repo rate (injection of overnight/short-term liquidity against government securities) and Reverse Repo rate (absorption of…
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The Repo and Reserve Repo rates are resorted to by the RBI as a tool of
Answer and explanation
Correct answer D
Under the Liquidity Adjustment Facility (LAF), the Repo rate (injection of overnight/short-term liquidity against government securities) and Reverse Repo rate (absorption of excess liquidity) are primary operational instruments used by the RBI for day-to-day 'Liquidity Control' in the banking system.
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UGC NET Commerce