Question

Repo rate is also known as

• A. Repurchase Agreement
• B. Reserve Purchase
• C. Revolving Credit
• D. Retail Banking

Answer 1

Answer:

A. Repurchase Agreement

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.