Question

At the time of deflation, RBI --- repo rate.

• A. increases
• B. maintains
• C. eliminates
• D. reduces

Answer 1

Answer:

D. reduces

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.