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Liquidity deficit of the banking sector increases

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The SARB enters into a repurchase agreement with Bank B. Bank B sells government bonds to the SARB in the first leg, and buys it back i the second leg. Which of the following is correct:

A- In the first leg rand flows to the SARB

B- In the first leg the liquidity deficit of the banking sector increases

C- in the second leg rand flows to the SARB

D- In the second leg the liquidity deficit of the banking sector increases

Reference no: EM131163434

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