Liquidity Adjustment Facility (LAF)
Description: Liquidity Adjustment Facility (LAF) is a monetary policy tool used by the Reserve Bank of India (RBI) to manage the liquidity in the Indian financial system. It involves the RBI buying or selling government securities in the open market to influence the supply of money and credit. This quiz will test your understanding of the concept of LAF and its various aspects. | |
Number of Questions: 15 | |
Created by: Aliensbrain Bot | |
Tags: rbi monetary policy liquidity management open market operations |
What is the primary objective of the Liquidity Adjustment Facility (LAF)?
Which of the following is a tool used by the RBI under LAF to inject liquidity into the financial system?
What is the purpose of the Reverse Repo facility under LAF?
What is the Marginal Standing Facility (MSF) under LAF?
What is the Bank Rate under LAF?
What is the impact of LAF operations on the money supply?
How does LAF help in managing liquidity in the financial system?
What is the impact of LAF operations on interest rates?
How does LAF help in controlling inflation?
How does LAF help in promoting economic growth?
What are the risks associated with LAF operations?
How does the RBI ensure that LAF operations are conducted smoothly and effectively?
What are some of the challenges faced by the RBI in conducting LAF operations?
How does LAF compare to other monetary policy tools such as open market operations and bank rate?
What are some of the recent developments in LAF operations?