Q: In the context of Indian economy, ‘Open Market Operations’ refers to
a) Borrowing by scheduled banks from the RBI
b) Lending by commercial banks to industry and trade
c) Purchase and sale of government securities by the RBI
d) None of the above
Correct Answer: Option (c)
- The repo and reverse repo rates are used when RBI purchase or sale the government securities. This route is known as Open Market Operations. Hence, option (c) is correct.
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