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    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.
    A Variable Reverse Repo Rate Correct Answer Incorrect Answer
    B Variable Repo Rate Correct Answer Incorrect Answer
    C Reverse Repo Rate Correct Answer Incorrect Answer
    D Repo Rates Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    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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