Which of the following is/are liquidity management tool/s of Reserve Bank of India? 1. Standing Deposit Facility (SDF) 2. Altering Repo and Reverse repo rates 3. Ways and Means Advances (WMA) How many of the statements given above are correct? |ForumIAS

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[A] Only one

[B] Only two

[C] Only three

[D] None

Answer: C

Notes:

Explanation: Liquidity Management Tools:

Standing Deposit Facility (SDF): SDF allows the RBI to absorb liquidity (deposit) from banks without giving government securities in return to the banks.
Altering Repo and Reverse repo rates: Altering these rates directly affects the deposit rate in banks and their lending rates.
Open Market Operation (OMO): OMO refers to sale or purchase of government securities (bonds) by the RBI.
Ways and Means Advances (WMA): It is a temporary loan facility to the central and state governments.

Source: FORUMIAS