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REPO operations refer to which of the following?
  • a)
    RBI maintaining status quo in the liquidity
  • b)
    RBI injection of liquidity into the system
  • c)
    Moral suasion by RBI
  • d)
    All of the above
  • e)
    None of these
Correct answer is option 'B'. Can you explain this answer?
Most Upvoted Answer
REPO operations refer to which of the following?a)RBI maintaining stat...
REPO operations refer to RBI injection of liquidity into the system. Repo is a money market instrument, which enables collateralised short term borrowing and lending through sale/purchase operations in debt instruments. Under a repo transaction, a holder of securities sells them to an investor with an agreement to repurchase at a predetermined date and rate. Monetary authorities use Repo rate to inject liquidity in order to control the inflation.
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