RBI Grade B Officer (General / DEPR / DSIM) 2021 · Question 216 of 260

- Read the passage given below and answer the following questions The Reserve Bank of India (RBI) adopted a new liquidity management framework in which there would be no fixed daily liquidity injection operations, but the central bank would act whenever the banking system requires money. The ______ will remain the operating target of the monetary policy, the RBI said, which means it will ensure enough liquidity to anchor the call rate at around the repo rate. (This is a recreated passage and not the exact one asked in the exam) What is the meaning of the italicized line in the passage? Statements: 1. RBI will adopt Accommodative monetary policy. 2. RBI will adopt expansionary monetary policy. 3. RBI will adopt contractionary monetary policy. 4. The call rate inches above the repo rate, it would signal liquidity deficit and the central bank will bring its tools to infuse liquidity 5. If the call rate is below the repo rate, that would mean the banking system has surplus liquidity

Monetary Policy

1. AA. 1 and 3 only
2. BB. 2 and 3 only
3. CC. 3 and 4 only
4. DD. 4 and 5 onlyCorrect
5. EE. None of the above