Question : ___________ is the interest rate at which banks can borrow overnight funds from the Reserve Bank of India (RBI).
Option 1: Bank rate
Option 2: Repo rate
Option 3: Reverse repo rate
Option 4: Prime rate
Correct Answer: Repo rate
Solution : The repo rate is the interest rate at which the RBI lends money to commercial banks against the collateral of government securities. This means that banks can borrow money from the RBI by selling their government securities to the RBI, and then repurchase the securities at a later date. The repo rate is used by the RBI to control liquidity in the banking system. When the RBI wants to increase liquidity in the banking system, it lowers the repo rate, which makes it cheaper for banks to borrow money from the RBI. When the RBI wants to decrease liquidity in the banking system, it raises the repo rate, which makes it more expensive for banks to borrow money from the RBI.
Therefore, the interest rate at which banks can borrow overnight funds from the Reserve Bank of India (RBI) is the repo rate.
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Question : The interest rate at which the Reserve Bank of India provides overnight liquidity to banks is called ________.
Question : _____________is the interest rate at which the Reserve Bank of India (RBI) lends money to commercial banks of the country.
Question : The rate at which the Reserve Bank of India lends to other commercial banks for the short term has been reduced. What is this rate called?
Question : The central bank of India is ___________.
Question : Reserve Bank of India (RBI) was established in the year:
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