Which one of the following activities of the Reserve Bank of India is considered to be part of "sterilization"?

Options

1. Conducting Open Market Operations
2. Oversight of settlement and payment systems
3. Debt and cash management for the Central and State Governments
4. Regulating the functions of Non-banking Financial Institutions

Correct Answer

Conducting Open Market Operations

Explanation

Sterilization involves the RBI’s Open Market Operations to neutralize the effects of foreign exchange inflows on domestic money supply.

← More UPSC PYQs