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Foreign Exchange and Exchange Rate

The Reserve B...

Question

The Reserve Bank of India (RBI) recently announced a hike in some policy rates and also indicated that there may be another change in near future. Which of the following is/are considered a policy rate(s) in the hands of the RBI?
A. Repo Rate
B. SLR
C. Inflation

A

Only (A)

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B

Only (B)

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C

Only (C)

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D

Only (A) and (B)

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Solution

The correct option is C Only (A) and (B)
RBI is the apex bank. It has the power to control the credit supply in an economy through monetary and fiscal policy.The Reserve Bank of India (RBI) recently announced a hike in some policy rates and also indicated that there may be another change in near future. Repo rate and SLR are considered a policy rates in the hands of the RBI. Repo rate is the rate at which central bank ends money to commercial banks. Statutory Liquidity Ratio rfers to the reserve amount which are to be maintained by the commercial banks in terms of gold and iiquid assets.

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Q. Read the extract given below and answer the questions that follow:
Aug 17, 2015
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