Economics · Monetary Policy Instruments
In modern macroeconomic management, repo and reverse repo operations have become highly critical instruments primarily because they:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Provide a permanent mechanism to control structural long-term inflation
- 2Serve as the active indirect tools for short-term liquidity management and monetary policy transmission✓
- 3Eliminate the necessity of maintaining the Bank Rate
- 4Completely replace fiscal policy instruments of the government
Correct answer
Serve as the active indirect tools for short-term liquidity management and monetary policy transmission
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