Question

Reverse Repo Rate is the rate at which Central Bank ___________________.

• A. Lends money to Commercial Banks for short-term
• B. Lends money to Commercial Banks for long-term
• C. Borrows money from Commercial Banks
• D. None of these

Answer 1

The correct option is C Borrows money from Commercial Banks

Reverse repo rate is the rate at which the central bank of a country borrows money from commercial banks within the country. It is a monetary policy instrument which can be used to control the money supply in the country.