The rate at which RBI lends to commercial banks for the short term is called ________.
This questions was previously asked in
SSC CHSL 26th May 2022 Shift-3
reverse repo rate
Incorrect Answerbank rate
Incorrect Answercash reserve rate
Incorrect AnswerExplanation:
- Repo Rate: The Repo Rate is the rate at which the Reserve Bank of India (RBI) lends money to commercial banks for short-term needs. It influences the cost of borrowing and helps control inflation.
- Reverse Repo Rate: This is the rate at which the RBI borrows money from commercial banks. It helps control liquidity in the economy.
- Bank Rate: This is the rate at which the central bank lends to commercial banks but not for short-term needs. It is generally higher than the repo rate.
- Cash Reserve Ratio (CRR): This is the percentage of a commercial bank's total deposits that must be held as reserves in the form of cash with the RBI.
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By: santosh