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Which of the following instruments is used by the Central Bank to control inflation?
  • a)
    Cash Reserve Ratio (CRR)
  • b)
    Statutory Liquidity Ratio (SLR)
  • c)
    Bank Rate
  • d)
    Open Market Operations (OMO)
Correct answer is option 'C'. Can you explain this answer?
Most Upvoted Answer
Which of the following instruments is used by the Central Bank to cont...
The Central Bank uses the Bank Rate to control inflation. By increasing the Bank Rate, the central bank raises the cost of borrowing for commercial banks, which, in turn, affects lending rates for businesses and consumers. Higher interest rates can reduce borrowing and spending, helping to control inflationary pressures in the economy.
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Which of the following instruments is used by the Central Bank to control inflation?a)Cash Reserve Ratio (CRR)b)Statutory Liquidity Ratio (SLR)c)Bank Rated)Open Market Operations (OMO)Correct answer is option 'C'. Can you explain this answer?
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