The RBA conducts market operations:
A)to offset the impact of its own or government transactions upon the cash rate
B)once a month only
C)to offset the impact of transfers between ADIs on the cash rate
D)secretly, so that the market does not know its position
E)All of these.

Question

Quizplus · Accepted Answer

The RBA conducts market operations to offset the impact of its own or government transactions upon the cash rate. This is done through the buying and selling of securities on the open market to control the supply of funds in the banking system and ultimately influence the cash rate. Market operations are conducted regularly, not just once a month, and are not done secretly. They do not necessarily aim to offset transfers between ADIs, as this would not have a significant impact on the cash rate.

The RBA Conducts Market Operations