The central bank doesn‘t disclose its foreign exchange management strategy, but it was evident in the last few years that the rupee was not allowed to appreciate despite healthy inflows, resulting in a rapid build-up of foreign exchange. From a low of $275 billion in September of 2013, when rupee came under severe pressure due to so-called ‘taper tantrums‘ by the US Federal Reserve, India now has record foreign exchange reserves of [1] billion, as on 21 August -a 95 per cent rise over seven years. Despite the Covid-19 pandemic, the foreign exchange kitty swelled by $62 billion since March. In this seven-year period, rupee ended the year with an appreciat ion against the dollar only once - in 2017. This year, the rupee is so far down by 2.04 per cent against the dollar. The latest RBI statement suggested that it is not uncomfortable with the appreciation in rupee, confirming the speculation among currency analysts that a departure was made in the exchange management policy.
The Reserve Bank of India (RBI) said that it will conduct liquidity operations worth Rs 20,000 crore in two tranches through sale and purchase of government securities (G-Secs). The two open market operations (OMOs) of Rs 10,000 crore each will be conducted on September 10 and 17, the central bank said in an official release. This is now the second such announcement in as many weeks. Last week, RBI had announced sale and purchase of GSecs worth Rs 20,000 crore, in two tranches, slated to be conducted on August 27 and September 3. In another move, RBI announced the infusion of Rs 1 lakh crore in mid September through long-term repo operations (LTROs) at floating rates, or the prevailing repo rate. Moreover, the central bank also gave an option to lenders who have earlier availed funds through LTROs, to reverse their transactions before maturity.
Q. Which of the following statements relate to the Long Term Repo Operatio ns as measure to support the economy in corona pandemic situations?
  • a)
    It is a measure that is expected to bring down short-term rates and also boost invest ment in corporate bonds
  • b)
    It would encourage banks to undertake maturity transformation smoothly and sea mlessly so as to augment credit flows to productive sectors
  • c)
    It will enhance liquidit y in the banking system by Rs 1 trillio n
  • d)
    All of the above
Correct answer is option 'D'. Can you explain this answer?

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This discussion on The central bank doesn‘t disclose its foreign exchange management strategy, but it was evident in the last few years that the rupee was not allowed to appreciate despite healthy inflows, resulting in a rapid build-up of foreign exchange. From a low of $275 billion in September of 2013, when rupee came under severe pressure due to so-called ‘taper tantrums‘ by the US Federal Reserve, India now has record foreign exchange reserves of [1] billion, as on 21 August -a 95 per cent rise over seven years. Despite the Covid-19 pandemic, the foreign exchange kitty swelled by $62 billion since March. In this seven-year period, rupee ended the year with an appreciat ion against the dollar only once -in 2017. This year, the rupee is so far down by 2.04 per cent against the dollar. The latest RBI statement suggested that it is not uncomfortable with the appreciation in rupee, confirming the speculation among currency analysts that a departure was made in the exchange management policy.The Reserve Bank of India (RBI) said that it will conduct liquidity operations worth Rs 20,000 crore in two tranches through sale and purchase of government securities (G-Secs). The two open market operations (OMOs) of Rs 10,000 crore each will be conducted on September 10 and 17, the central bank said in an official release. This is now the second such announcement in as many weeks. Last week, RBI had announced sale and purchase of GSecs worth Rs 20,000 crore, in two tranches, slated to be conducted on August 27 and September 3. In another move, RBI announced the infusion of Rs 1 lakh crore in mid September through long-term repo operations (LTROs) at floating rates, or the prevailing repo rate. Moreover, the central bank also gave an option to lenders who have earlier availed funds through LTROs, to reverse their transactions before maturity.Q.Which of the following statements relate to the Long Term Repo Operatio ns as measure to support the economy in corona pandemic situations?a)It is a measure that is expected to bring down short-term rates and also boost invest ment in corporate bondsb)It would encourage banks to undertake maturity transformation smoothly and sea mlessly so as to augment credit flows to productive sectorsc)It will enhance liquidit y in the banking system by Rs 1 trillio nd)All of the aboveCorrect answer is option 'D'. Can you explain this answer? is done on EduRev Study Group by CLAT Students. The Questions and Answers of The central bank doesn‘t disclose its foreign exchange management strategy, but it was evident in the last few years that the rupee was not allowed to appreciate despite healthy inflows, resulting in a rapid build-up of foreign exchange. From a low of $275 billion in September of 2013, when rupee came under severe pressure due to so-called ‘taper tantrums‘ by the US Federal Reserve, India now has record foreign exchange reserves of [1] billion, as on 21 August -a 95 per cent rise over seven years. Despite the Covid-19 pandemic, the foreign exchange kitty swelled by $62 billion since March. In this seven-year period, rupee ended the year with an appreciat ion against the dollar only once -in 2017. This year, the rupee is so far down by 2.04 per cent against the dollar. The latest RBI statement suggested that it is not uncomfortable with the appreciation in rupee, confirming the speculation among currency analysts that a departure was made in the exchange management policy.The Reserve Bank of India (RBI) said that it will conduct liquidity operations worth Rs 20,000 crore in two tranches through sale and purchase of government securities (G-Secs). The two open market operations (OMOs) of Rs 10,000 crore each will be conducted on September 10 and 17, the central bank said in an official release. This is now the second such announcement in as many weeks. Last week, RBI had announced sale and purchase of GSecs worth Rs 20,000 crore, in two tranches, slated to be conducted on August 27 and September 3. In another move, RBI announced the infusion of Rs 1 lakh crore in mid September through long-term repo operations (LTROs) at floating rates, or the prevailing repo rate. Moreover, the central bank also gave an option to lenders who have earlier availed funds through LTROs, to reverse their transactions before maturity.Q.Which of the following statements relate to the Long Term Repo Operatio ns as measure to support the economy in corona pandemic situations?a)It is a measure that is expected to bring down short-term rates and also boost invest ment in corporate bondsb)It would encourage banks to undertake maturity transformation smoothly and sea mlessly so as to augment credit flows to productive sectorsc)It will enhance liquidit y in the banking system by Rs 1 trillio nd)All of the aboveCorrect answer is option 'D'. Can you explain this answer? are solved by group of students and teacher of CLAT, which is also the largest student community of CLAT. If the answer is not available please wait for a while and a community member will probably answer this soon. You can study other questions, MCQs, videos and tests for CLAT on EduRev and even discuss your questions like The central bank doesn‘t disclose its foreign exchange management strategy, but it was evident in the last few years that the rupee was not allowed to appreciate despite healthy inflows, resulting in a rapid build-up of foreign exchange. From a low of $275 billion in September of 2013, when rupee came under severe pressure due to so-called ‘taper tantrums‘ by the US Federal Reserve, India now has record foreign exchange reserves of [1] billion, as on 21 August -a 95 per cent rise over seven years. Despite the Covid-19 pandemic, the foreign exchange kitty swelled by $62 billion since March. In this seven-year period, rupee ended the year with an appreciat ion against the dollar only once -in 2017. This year, the rupee is so far down by 2.04 per cent against the dollar. The latest RBI statement suggested that it is not uncomfortable with the appreciation in rupee, confirming the speculation among currency analysts that a departure was made in the exchange management policy.The Reserve Bank of India (RBI) said that it will conduct liquidity operations worth Rs 20,000 crore in two tranches through sale and purchase of government securities (G-Secs). The two open market operations (OMOs) of Rs 10,000 crore each will be conducted on September 10 and 17, the central bank said in an official release. This is now the second such announcement in as many weeks. Last week, RBI had announced sale and purchase of GSecs worth Rs 20,000 crore, in two tranches, slated to be conducted on August 27 and September 3. In another move, RBI announced the infusion of Rs 1 lakh crore in mid September through long-term repo operations (LTROs) at floating rates, or the prevailing repo rate. Moreover, the central bank also gave an option to lenders who have earlier availed funds through LTROs, to reverse their transactions before maturity.Q.Which of the following statements relate to the Long Term Repo Operatio ns as measure to support the economy in corona pandemic situations?a)It is a measure that is expected to bring down short-term rates and also boost invest ment in corporate bondsb)It would encourage banks to undertake maturity transformation smoothly and sea mlessly so as to augment credit flows to productive sectorsc)It will enhance liquidit y in the banking system by Rs 1 trillio nd)All of the aboveCorrect answer is option 'D'. Can you explain this answer? over here on EduRev! Apart from being the largest CLAT community, EduRev has the largest solved Question bank for CLAT.
This discussion on The central bank doesn‘t disclose its foreign exchange management strategy, but it was evident in the last few years that the rupee was not allowed to appreciate despite healthy inflows, resulting in a rapid build-up of foreign exchange. From a low of $275 billion in September of 2013, when rupee came under severe pressure due to so-called ‘taper tantrums‘ by the US Federal Reserve, India now has record foreign exchange reserves of [1] billion, as on 21 August -a 95 per cent rise over seven years. Despite the Covid-19 pandemic, the foreign exchange kitty swelled by $62 billion since March. In this seven-year period, rupee ended the year with an appreciat ion against the dollar only once -in 2017. This year, the rupee is so far down by 2.04 per cent against the dollar. The latest RBI statement suggested that it is not uncomfortable with the appreciation in rupee, confirming the speculation among currency analysts that a departure was made in the exchange management policy.The Reserve Bank of India (RBI) said that it will conduct liquidity operations worth Rs 20,000 crore in two tranches through sale and purchase of government securities (G-Secs). The two open market operations (OMOs) of Rs 10,000 crore each will be conducted on September 10 and 17, the central bank said in an official release. This is now the second such announcement in as many weeks. Last week, RBI had announced sale and purchase of GSecs worth Rs 20,000 crore, in two tranches, slated to be conducted on August 27 and September 3. In another move, RBI announced the infusion of Rs 1 lakh crore in mid September through long-term repo operations (LTROs) at floating rates, or the prevailing repo rate. Moreover, the central bank also gave an option to lenders who have earlier availed funds through LTROs, to reverse their transactions before maturity.Q.Which of the following statements relate to the Long Term Repo Operatio ns as measure to support the economy in corona pandemic situations?a)It is a measure that is expected to bring down short-term rates and also boost invest ment in corporate bondsb)It would encourage banks to undertake maturity transformation smoothly and sea mlessly so as to augment credit flows to productive sectorsc)It will enhance liquidit y in the banking system by Rs 1 trillio nd)All of the aboveCorrect answer is option 'D'. Can you explain this answer? is done on EduRev Study Group by CLAT Students. The Questions and Answers of The central bank doesn‘t disclose its foreign exchange management strategy, but it was evident in the last few years that the rupee was not allowed to appreciate despite healthy inflows, resulting in a rapid build-up of foreign exchange. From a low of $275 billion in September of 2013, when rupee came under severe pressure due to so-called ‘taper tantrums‘ by the US Federal Reserve, India now has record foreign exchange reserves of [1] billion, as on 21 August -a 95 per cent rise over seven years. Despite the Covid-19 pandemic, the foreign exchange kitty swelled by $62 billion since March. In this seven-year period, rupee ended the year with an appreciat ion against the dollar only once -in 2017. This year, the rupee is so far down by 2.04 per cent against the dollar. The latest RBI statement suggested that it is not uncomfortable with the appreciation in rupee, confirming the speculation among currency analysts that a departure was made in the exchange management policy.The Reserve Bank of India (RBI) said that it will conduct liquidity operations worth Rs 20,000 crore in two tranches through sale and purchase of government securities (G-Secs). The two open market operations (OMOs) of Rs 10,000 crore each will be conducted on September 10 and 17, the central bank said in an official release. This is now the second such announcement in as many weeks. Last week, RBI had announced sale and purchase of GSecs worth Rs 20,000 crore, in two tranches, slated to be conducted on August 27 and September 3. In another move, RBI announced the infusion of Rs 1 lakh crore in mid September through long-term repo operations (LTROs) at floating rates, or the prevailing repo rate. Moreover, the central bank also gave an option to lenders who have earlier availed funds through LTROs, to reverse their transactions before maturity.Q.Which of the following statements relate to the Long Term Repo Operatio ns as measure to support the economy in corona pandemic situations?a)It is a measure that is expected to bring down short-term rates and also boost invest ment in corporate bondsb)It would encourage banks to undertake maturity transformation smoothly and sea mlessly so as to augment credit flows to productive sectorsc)It will enhance liquidit y in the banking system by Rs 1 trillio nd)All of the aboveCorrect answer is option 'D'. Can you explain this answer? are solved by group of students and teacher of CLAT, which is also the largest student community of CLAT. If the answer is not available please wait for a while and a community member will probably answer this soon. You can study other questions, MCQs, videos and tests for CLAT on EduRev and even discuss your questions like The central bank doesn‘t disclose its foreign exchange management strategy, but it was evident in the last few years that the rupee was not allowed to appreciate despite healthy inflows, resulting in a rapid build-up of foreign exchange. From a low of $275 billion in September of 2013, when rupee came under severe pressure due to so-called ‘taper tantrums‘ by the US Federal Reserve, India now has record foreign exchange reserves of [1] billion, as on 21 August -a 95 per cent rise over seven years. Despite the Covid-19 pandemic, the foreign exchange kitty swelled by $62 billion since March. In this seven-year period, rupee ended the year with an appreciat ion against the dollar only once -in 2017. This year, the rupee is so far down by 2.04 per cent against the dollar. The latest RBI statement suggested that it is not uncomfortable with the appreciation in rupee, confirming the speculation among currency analysts that a departure was made in the exchange management policy.The Reserve Bank of India (RBI) said that it will conduct liquidity operations worth Rs 20,000 crore in two tranches through sale and purchase of government securities (G-Secs). The two open market operations (OMOs) of Rs 10,000 crore each will be conducted on September 10 and 17, the central bank said in an official release. This is now the second such announcement in as many weeks. Last week, RBI had announced sale and purchase of GSecs worth Rs 20,000 crore, in two tranches, slated to be conducted on August 27 and September 3. In another move, RBI announced the infusion of Rs 1 lakh crore in mid September through long-term repo operations (LTROs) at floating rates, or the prevailing repo rate. Moreover, the central bank also gave an option to lenders who have earlier availed funds through LTROs, to reverse their transactions before maturity.Q.Which of the following statements relate to the Long Term Repo Operatio ns as measure to support the economy in corona pandemic situations?a)It is a measure that is expected to bring down short-term rates and also boost invest ment in corporate bondsb)It would encourage banks to undertake maturity transformation smoothly and sea mlessly so as to augment credit flows to productive sectorsc)It will enhance liquidit y in the banking system by Rs 1 trillio nd)All of the aboveCorrect answer is option 'D'. Can you explain this answer? over here on EduRev! Apart from being the largest CLAT community, EduRev has the largest solved Question bank for CLAT.