Question

Credit rating is a quantitative credit control measure of the central bank.

• A. True
• B. False

Answer 1

The correct option is A True

A credit rating is an evaluation of the credit risk related to a prospective debtor, predicting their ability to pay back the debt, and an implicit forecast of the likelihood of the debt being defaulted. This is a quantitative credit control measure taken by the central bank. During inflation, the credit rating is increased in order to decrease the amount of credit the economy and during deflation, the credit rating is decreased in order to increase the amount of credit the economy.