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UPSC 2023: Which one of the following activities of the Reserve Bank of India is considered to be part of ‘sterilization’?
(a)Conducting ‘Open Market Operations’
(b)Oversight of settlement and payment systems
(c)Debt and cash management for the Central and State Governments
(d)Regulating the functions of Non-banking Financial Institutions
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Not attemptedCorrect Answer: (a) Conducting ‘Open Market Operations’
Sterilization refers to the RBI’s neutralisation of excess rupee liquidity created by forex inflows; the standard tool is an outright sale (or purchase) of government securities through Open Market Operations. Hence conducting OMOs constitutes sterilization. ([rbi.org.in](https://www.rbi.org.in/scripts/BS_ViewBulletin.aspx?Id=9828&utm_source=openai))
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Frequently Asked Questions
What is the correct answer to this UPSC 2023 Indian Economy question?▼
The correct answer is option (a): Conducting ‘Open Market Operations’. Watch the detailed video explanation in our Sherlocking Prelims course on UnlockIAS.
Which year was this Monetary Policy & Money Supply question asked in UPSC Prelims?▼
This question was asked in UPSC CSE Prelims 2023, GS Paper 1, as Question 24. It falls under Indian Economy > Monetary Policy & Money Supply.
What is the difficulty level of this UPSC question?▼
This question is rated "easy". It tests basic recall and most well-prepared aspirants should answer it correctly.
How many UPSC Prelims questions have been asked from Monetary Policy & Money Supply?▼
UPSC has asked 27 questions from Monetary Policy & Money Supply (under Indian Economy) across multiple years. Visit the topic page to see the full list and year-wise trends.