The repo rate is a key tool of monetary policy used by the RBI to control inflation and manage liquidity in the banking system. A higher repo rate makes borrowing more expensive for banks, which can lead to higher lending rates for consumers and businesses, thus curbing demand and inflation.
Which of the following statements appropriate describe the term 'repo rate'?
Asked in FINANCE AND ACCOUNTS OFFICER TREASURY OFFICER 2016 · Topic: Money & Banking (Monetary Policy: Objectives, Instruments (quantitative and qualitative), and Transmission Mechanism)
Show answer
Answer: A. It is the rate at which RBI lends money to commercial banks in the event of any shortfall of funds
More Economic Development questions
- "Open Market Operations" are the feature of which of the following policy ?
- If RBI hike repo rate, it means
- Which of the following are included in M1 definition of money for the Indian economy? 1. Reserves 2. Currency 3. Time deposits 4. Demand deposits Select the correct answer using the code given below.
- Which one of the following forms of money supply is considered as the most widely used in the Indian monetary system ?
- The terms 'Ethereum, Solana, Polkadot and Tether', sometimes mentioned in the news, refer to
- Which of the following are included in the definition of Narrow Money ? 1. Currency with the public 2. Demand deposits 3. 'Other' deposits with Reserve Bank of India 4. Banker's deposits with Reserve Bank of India Select the correct answer using the code given below :
- Currency with the public Notes and coins held by the public. 2. Demand deposits Deposits held by the public with commercial banks and co-operative banks that are withdrawable on demand (e.g., savings accounts, current accounts). 3. 'Other' deposits with Reserve Bank of India Demand deposits with RBI of entities other than banks and the government (e.g., deposits of quasi-government institutions, international financial institutions like IMF). 4. Banker's deposits with Reserve Bank of India Deposits of commercial banks with the RBI, which form a part of the reserves maintained by banks. These are included in the definition of M0 (Reserve Money) but not M1 in the standard Indian monetary aggregates. 532. What would be the impact on the economy if people start holding more currency in hand and less in deposits ?
- The term 'paper gold' refers to :
