In which year was the fixed rate repos in government securities was introduced to give maneuverability in liquidity management?
Show answer & explanation
Correct answer: B
Explanation
Correct Answer: 1997
Explanation:
- The Reserve Bank of India (RBI) introduced the fixed-rate repo in government securities in 1997 to improve liquidity management in the banking system.
- Under the repo (Repurchase Agreement), banks borrow short-term funds from the RBI by selling government securities with an agreement to repurchase them later.
- The repo rate is one of the RBI's key monetary policy tools for regulating liquidity and short-term interest rates.