Home › SBI PO › Banking Awareness › Monetary Policy › When liquidity is in excess the RBI resorts to:
When liquidity is in excess the RBI resorts to:
ASelling securities
BSealing securities
CSettling securities
DSplitting securities
Answer & Solution
Correct answer: A. Selling securities
1. Selling drains rupees out of the market.
2. Buying would put more rupees in.
3. So excess liquidity is met by selling securities.
_Source: RBI, FAQs on the Government Securities Market in India_
Related questions
The Monetary Policy Report is published once in every:Minutes of an MPC meeting are published on which day after the meeting?Outright purchase or sale of government securities by RBI to manage durable liquidity is cCRR is maintained as a percent of a bank's:The Bank Rate is the penal rate for shortfalls in maintaining:The ceiling of the LAF corridor is the:The MSF rate sits how far above the policy repo rate?Banks can borrow overnight from RBI by dipping into their SLR up to 2 percent under the: