Civil Services Prep

Prelims 2024 · Economy · Question 100

With reference to the Indian economy, "Collateral Borrowing and Lending Obligations" are the instruments of:

  1. Bond market
  2. Forex market
  3. Money market
  4. Stock market

Answer

Money market

  • (a) Bond market: Incorrect. CBLO was not a bond trading instrument; it was a short-term borrowing-lending mechanism using collateral, mainly government securities.
  • (b) Forex market: Incorrect. Forex market deals with exchange of currencies, whereas CBLO related to rupee liquidity management.
  • (c) Money market: Correct. Collateral Borrowing and Lending Obligation (CBLO) was a money market instrument used for short-term funds, operated by CCIL.
  • (d) Stock market: Incorrect. Stock market deals with equity shares and related securities, not CBLO.

Answer: (c) Money market.

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