Economics · Monetary Policy
In a persistent liquidity surplus scenario, the weighted average call rate (WACR) trades consistently near the lower bound of the policy corridor. Consider the following statements: 1. Conducting Variable Rate Reverse Repo (VRRR) auctions would help align WACR closer to the policy repo rate. 2. Open Market Purchase (OMO) of government securities would likely push WACR upward. 3. Increasing the Cash Reserve Ratio (CRR) permanently withdraws primary liquidity from the system. 4. Fine-tuning VRRR operations are typically short-tenor tools used for liquidity calibration. Which of the above statements are correct?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 11, 2 and 4 only
- 22 and 3 only
- 31 and 2 only
- 41, 3 and 4 only✓
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1, 3 and 4 only
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