Current Affairs · Banking and Finance
What is the primary objective of large-scale central bank liquidity injections into the banking system via short-term and durable monetary tools?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1To permanently peg the domestic currency exchange rate against a single global currency.
- 2To alleviate systemic deficit conditions, anchor call money rates near the policy repo rate, and ensure smooth monetary policy transmission.✓
- 3To finance the central government's fiscal deficit directly via primary markets.
- 4To artificially inflate the stock market valuation indices.
Correct answer
To alleviate systemic deficit conditions, anchor call money rates near the policy repo rate, and ensure smooth monetary policy transmission.
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