Answer-Which statement is correct regarding the Repo rate?

Repo rate is the rate at which the central bank of a country Reserve Bank of India in case of India lends money to commercial banks in the event of any shortfall of funds. Repo rate is used by monetary authorities to control inflation.

Question

Which statement is correct regarding the Repo rate?

A It is the rate at which RBI lends money to Commercial Banks generally against Government Securities

B It is the rate given to prime members of Bank

C It is the rate at which RBI borrows money from Commercial Banks generally against Government Securities

D It is the rate at which Commercial Banks keep Deposits with RBI

E None of the Above

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Which statement is correct regarding the Repo rate?

Solution