Question:
What are the key policy tools used by the Central Bank of Sri Lanka in conducting its monetary policy at present?
(1) Bank rate and policy rates
(2) Statutory reserve requirements and open market operations
(3) Moral suasion and policy rates
(4) Credit squeeze and statutory reserve requirements
(5) Policy rates and open market operations
Correct Answer:
(5)
Answer Explanation:
Under its current market-oriented framework, the Central Bank of Sri Lanka primarily relies on its Policy Interest Rates (the SDFR and SLFR) to signal its monetary stance, while actively using Open Market Operations (OMO) to manage daily market liquidity and steer the interbank rates.
Topic: Monetary Policy Year: 2018
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