To lower interest rates, the RBI should do what

(A) Buy securities
(B) Decrease the money supply
(C) Raise the treasury bill rate
(D) Raise the reserve requirement

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Correct Answer : Buy securities
Question Asked : OPSC OCS Pre. Exam 2018
Explanation : To lower interest rates, the RBI needs to increase money supply in the economy. Money supply can be increased through purchase of securities by RBI. This action of buying of government securities from the market by RBI is known as Open Market Operation.
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Web Title : to lower interest rates the rbi should do what
Tags : Indian Economy
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