Question : Which of the following is the instrument of monetary policy used by RBI?
Option 1: Base rate
Option 2: Call rate
Option 3: Bank rate
Option 4: Discount rate
Correct Answer: Bank rate
Solution : The correct option is the Bank rate .
The monetary policy instrument used by the Reserve Bank of India (RBI) is the bank rate. It is the rate at which the RBI lends money to commercial banks, influencing overall economic interest rates—changes in the bank rate impact borrowing costs, credit availability, and economic activity.
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