- Sterilization is a monetary policy tool used by central banks. - Its purpose is to neutralize the impact of foreign exchange interventions on domestic money supply. - The primary tool used for sterilization is Open Market Operations (buying or selling government securities).
Which one of the following activities of the Reserve Bank of India is considered to be part of 'sterilization'?
Asked in UPSC IAS 2023 · Topic: Money & Banking (Monetary Policy: Objectives, Instruments (quantitative and qualitative), and Transmission Mechanism)
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