Economics • Banking & FinanceEasy
Which of the following constitutes a quantitative monetary policy instrument used by the Reserve Bank of India?
A. Moral suasion directed at commercial lending portfolios
B. Margin requirements on specific categories of secured loans
C. Open Market Operations involving the purchase and sale of government securities✓ Correct Answer
D. Direct sector-specific credit rationing guidelines
💡 Solution & Explanation
Open market operations represent a primary quantitative tool where the central bank buys or sells government securities to regulate aggregate money supply in the banking system. Moral suasion and margin requirements are classified as qualitative or selective instruments. Credit rationing similarly targets specific sectors rather than exerting broad macroeconomic influence. Statutory liquidity adjustments also function as quantitative levers mandated under the Banking Regulation Act.
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