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Which one of the following activities of the Reserve Bank of India is considered to be part of ‘sterilization

,

Which one of the following activities of the Reserve Bank of India is considered to be part of ‘sterilization?

(a)

Conducting ‘Open Market Operations’

(b)

Oversight of settlement and payment systems

(c)

Debt and cash management for the Central and State Governments

(d)

Regulating the functions of Non-banking Financial Institutions

Answer:

(a)

Core Books/NCERT

Explanation

The answer is (a), conducting Open Market Operations. Sterilisation Intervention by the RBI to keep the money supply stable against an increase in foreign exchange inflow. Sterilisation is carried out through open market operation.