Economics · Monetary Policy
Suppose inflation remains persistently high despite adequate liquidity in the banking system, and banks continue to lend aggressively. Which of the following policy combinations would be most suitable for the central bank?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Lower Repo Rate and lower SLR
- 2Increase CRR and conduct sale of securities through OMOs✓
- 3Reduce Reverse Repo Rate and expand consumer credit
- 4Purchase securities and reduce MSF rate
Correct answer
Increase CRR and conduct sale of securities through OMOs
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