alleryWhen 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_
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