AGovernment of India
BMinistry of Finance
CReserve bank of India
DNone of these
Answer:
C. Reserve bank of India
Read Explanation:
The Repo rate (Repurchase rate) is the rate at which the Reserve Bank of India lends money to commercial banks in the event of any shortfall of funds.
It's an important monetary policy tool used by the RBI to control inflation, money supply, and liquidity in the economy.
When the RBI wants to control inflation, it increases the repo rate, which makes borrowing more expensive for commercial banks.
This reduces the money supply in the economy.
Conversely, when the RBI wants to stimulate economic growth, it reduces the repo rate, making it cheaper for banks to borrow, which increases the money supply.
The Monetary Policy Committee (MPC) of the RBI, headed by the RBI Governor, meets several times a year to review and decide on the repo rate based on economic conditions and inflation targets.