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    Question

    Repo rate in monetary policy context refers specifically

    to which of the following scenarios or transactions?
    A Rate at which commercial banks lend funds to NBFCs Correct Answer Incorrect Answer
    B Rate at which commercial banks borrow funds from RBI Correct Answer Incorrect Answer
    C Rate at which RBI borrows funds from commercial banks Correct Answer Incorrect Answer
    D Rate at which banks lend overnight funds to other banks Correct Answer Incorrect Answer
    E Rate at which commercial banks borrow from international banks Correct Answer Incorrect Answer

    Solution

    The repo rate is the rate at which the Reserve Bank of India lends money to commercial banks against government securities. It is a key tool in controlling liquidity and inflation in the economy.

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