When Injecting Reserves in the Banking System Through a Repurchase

question 22

Multiple Choice

When injecting reserves in the banking system through a repurchase agreement the Reserve Bank of Australia (RBA) :

• A)buys specific types of securities from the ESA holders on the basis that the RBA will resell them back to them later.
• B)sells specific types of securities to the ESA holders on the basis that the RBA will repurchase them back later.
• C)buys and sells securities in the market on behalf of ESA holders.
• D)buys and keeps specific types of securities in its portfolio for unspecified horizon.