Explanation:
Funding nostro accounts requires the placement of liquidity, which is a use of intraday liquidity. Income funds flow and intraday credit are sources of liquidity. Entering a term repo as a seller means the bank is receiving cash, which is a source of liquidity.
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20.8.1. Which of the following is a USE of intraday liquidity?
A
Income funds flow
B
Term repo (as the repo seller)
C
Funding of nostro accounts (at correspondent bank outside home market)
D
Intraday credit (Federal Reserve unsecured committed line of credit, LOC)
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