Match the statements given under A with the correct options given under B
Match the statements given under A with the correct options given under B.
| (A) | (B) |
| (i) Repurchase Rate | a. Rate at which RBI lends money to commercial banks to meet their short-term needs |
| b. Rate at which RBI lends money to commercial banks to meet their long-term needs |
Anurag Pathak Changed status to publish December 25, 2023
Ans – (i) – a
Explanation:-
Repurchase rate is the other name of Repo Rate.
Repo Rate is the rate at which RBI lends money to commercial bank to meet their short-term needs.
Repo (Repurchase) Rate:-
Repo rate is the rate at which the central bank of a country lends money to commercial banks to meet their short-term needs.
The central bank advances loans against approved securities or eligible bills of exchange.
Why Repo rate is called repurchase rate.
Repo rate is technically a repurchase agreement in which the commercial banks offer securities such as Treasury Bills to the RBI in return for short-term funds. The banks also agree to repurchase those securities at a predetermined price
Anurag Pathak Changed status to publish December 25, 2023
