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Consider the following statements
1. Liquidity Adjustment Facility operations help the RBI effectively transmit interest rate signals to the market.
2. Under the repo or repurchase option, banks borrow money from the RBI via the sale of securities with an agreement to purchase the securities back at a fixed rate at a future date.
Which of the statements given above is/are correct?
A) Only 1
B) Only 2
C) Both 1 and 2
D) Neither 1 nor 2
Correct answer:
C) Both 1 and 2
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