Question
________ happen when RBI desires that liquidity should be squeezed from the economy but Banks are not eager to deposit money with RBI at rate fixed by RBI.
Solution
Variable Reverse Repo Rate: Many of times, it may happen that when RBI desires that liquidity should be squeezed from the economy but Banks are not eager to deposit money with RBI at rate fixed by RBI as there may be case that rate of interest in market is higher than Reverse Repo Rate as fixed by RBI.
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