RBI governor, Shaktikanta Das gave orders to sell the financial assets to finance the deficit of BoP. What type of transaction is this?
Answer & explanation
Correct answer: option 1
The correct answer is option 1: Accommodating transactions
Accommodating transactions refer to actions taken by the central bank or government to manage the balance of payments (BoP) and address deficits or surpluses. Selling financial assets to finance a BoP deficit is an example of an accommodating transaction, as it involves adjusting the financial operations to address the imbalance in the BoP.
Autonomous transactions are the transactions done with profit motives.