The repo rate is the rate at which

the RBI lends short-term money to banks against government securitiesCorrect answerYour answerbanks lend to their best borrowersCorrect answerYour answerthe government borrows from the publicCorrect answerYour answerbanks pay interest on savings accountsCorrect answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer A

Correct answer: A

In a repo, a bank sells government securities to the RBI and agrees to buy them back, so in effect it borrows from the RBI for a short period.
The repo rate is the policy rate the Monetary Policy Committee sets. Raising it makes borrowing dearer and is used to fight inflation.

Concept: The repo rate
Typical timeTypical: 35 s
Your timeYours: —

The rule this testsThe Reserve Bank and monetary policy

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The repo rate is the rate at which

Explanation