To control inflation, the RBI would most likely

raise the repo rateCorrect answerYour answercut the repo rateCorrect answerYour answercut the CRRCorrect answerYour answerbuy government securitiesCorrect answerYour answer

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CorrectNot quiteAnswer A

Correct answer: A

A higher repo rate makes borrowing from the RBI costlier, so banks raise their lending rates.
Less borrowing and spending lowers demand and inflation.

Concept: Repo rate and inflation
Typical timeTypical: 70 s
Your timeYours: —

The rule this testsRepo, reverse repo and bank rate

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To control inflation, the RBI would most likely

Explanation