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WAEC Commerce 1998 Question 21

Question 21

Banking

Which of the following is not a means of controlling credit by the Central Bank?

  1. A.Fixing the bank rate
  2. B.Open market operations
  3. C.Clearing inter-bank indebtedness
  4. D.Special deposits
  5. E.Cash liquidity ratio
Show the answer and explanation

Answer: C (Clearing inter-bank indebtedness)

Explanation

Clearing settles debts between banks; it does not control the amount of credit.