Discussion
Moral Suasion and Statutory Liquidity Ratio (SLR) are instruments of
Answer: A
Both are instruments of monetary policy.
The Statutory Liquidity Ratio is a quantitative instrument, prescribing the share of liabilities a bank must hold in liquid assets. Moral suasion is qualitative - the central bank persuading banks to follow its lead without any formal direction. Both are exercised by the RBI.
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