Liquidity Adjustment Facility (LAF) and Open Market Operations (OMO) are one of the two major monetary policy tools of the Reserve Bank of India. How the LAF is different from OMO?
1. While LAF is a daily activity, OMO is a monthly activity
2. While LAF assists banks to adjust to their day-to-day mismatches in liquidity, OMO modulate the rupee liquidity conditions in the market
Choose the correct option from the codes given below:
Liquidity adjustment facility (LAF) is a monetary policy which allows banks to borrow money through repurchase agreements. LAF consists of repo and reverse repo operations.
This question is a part of GKToday's Integrated IAS General Studies Module