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    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 Correct Answer Incorrect Answer
    B It is the rate given to prime members of Bank Correct Answer Incorrect Answer
    C It is the rate at which RBI borrows money from Commercial Banks generally against Government Securities Correct Answer Incorrect Answer
    D It is the rate at which Commercial Banks keep Deposits with RBI Correct Answer Incorrect Answer
    E None of the Above Correct Answer Incorrect Answer

    Solution

    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.

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