Question

A short-term interest rate which the RBI charges on commercial banks, on the loans given by RBI

• A. Reverse Repo Rate
• B. Repo Rate
• C. Cash Reserve Ratio
• D. Statutory Liquidity Ratio

Answer 1

Answer:

B. Repo Rate

Repo Rate:

• It is a short-term interest rate which RBI charges on commercial banks on loans given by RBI
• Repo rate is also known as Repurchase Agreement or Repurchasing Option.
• At the time of inflation, RBI increases repo rate.
• At the time of deflation, RBI reduces repo rate.