An increase in the Bank Rate generally indicates that the ........

Economic Affairs Money Supply and Monetary Policy

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An increase in the Bank Rate generally indicates that the

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UPSC CSP Previous Year Paper (2013)

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market rate of interest is likely to fall

Central Bank is no longer making loans to commercial banks

Central Bank is following an easy money policy

Central Bank is following a tight money policy

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Explanation:

Increase in bank rate increases the cost of borrowing by commercial banks which results in the reduction in credit volume to the banks and hence the supply of money declines. Increase in the bank rateis the symbol of tightening of RBI monetary policy.

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