Current Affairs · Banking and Finance
What is the primary short-term objective of the RBI when it performs large-scale liquidity infusions into the banking system during periods of tight liquidity?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1To permanently absorb excess cash from public accounts
- 2To forcefully reduce retail inflation to absolute zero within a month
- 3To fix a rigid exchange rate for the Indian Rupee against the British Pound
- 4To manage temporary liquidity shortages caused by factors like quarterly tax outflows or year-end adjustments✓
Correct answer
To manage temporary liquidity shortages caused by factors like quarterly tax outflows or year-end adjustments
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