Question

Repo rate is the rate at which _____________________.

• A. Commercial Banks purchase government securities from the central bank
• B. Commercial Banks can take loans from the central bank
• C. Commercial Banks can keep their deposits with the central bank
• D. Short-term loans are given by commercial banks

Answer 1

The correct option is B Commercial Banks can take loans from the central bank

Repo rate is the rate at which the central bank of a country lends money to commercial banks in the event of any shortfall of funds. Repo rate is used by monetary authorities to control inflation.