Economics · Money Market
The interbank market supports liquidity redistribution within the banking system because some banks may face temporary surplus while others face shortfall. The importance of this market lies mainly in its role in:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1facilitating short-term adjustment of liquidity between institutions✓
- 2fixing statutory reserve requirements
- 3replacing the role of deposit mobilization
- 4providing long-term infrastructure finance
Correct answer
facilitating short-term adjustment of liquidity between institutions
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