What does the term “Repo Rate” refer to in the Indian economy ?
The interest rate at which the Reserve Bank of India lends short-term funds to commercial banks against securities
Repo stands for repurchase agreement: a commercial bank sells government securities to the Reserve Bank of India and agrees to buy them back later at a fixed price.
The rate charged by the central bank on such short-term lending against securities is the repo rate, and it is the main policy rate used by the Monetary Policy Committee to control inflation and liquidity.
The rate at which the central bank borrows from commercial banks is the reverse repo rate, while lending rates to the public and small savings rates are separate rates set by banks and the government.
Hence, The interest rate at which the Reserve Bank of India lends short-term funds to commercial banks against securities.
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Important Questions from Money and Banking
Which one of the following is likely to be the most inflationary in its effects?
Which one of the following effects of creation of black money in India has been the main cause of worry to the Government of India?
Consider the following statements :
The effect of devaluation of a currency is that it necessarily
1. improves the competitiveness of the domestic exports in the foreign markets
2. increase the foreign value of domestic currency
3. improves the trade balance
Which of the above statements is/are correct?
Indian Government Bond Yields are influenced by which of the following?
1. Actions of the United States Federal Reserve
2. Actions of the Reserve Bank of India
3. Inflation and short-term interest rates
Select the correct answer using the code given below.
With reference to “Urban Cooperative Banks" in India, consider the following statements :
1. They are supervised and regulated by local boards set up by the State Governments.
2. They can issue equity shares and preference shares.
3. They were brought under the purview of the Banking Regulation Act, 1949 through an Amendment in 1966
Which of the statements given above is/are correct?
