1
Question
When the RBI __________ the repo rate, the commercial banks in turn ___________ the rate of interest on loans for the public.
When the RBI __________ the repo rate, the commercial banks in turn ___________ the rate of interest on loans for the public.
Open in App
Solution
The correct option is A increases, increase
The Reserve Bank of India controls the rate of interest on loans and savings. This is carried out by controling the interest rate at which commercial banks borrow from the RBI. The rate of interest at which the commercial banks borrow money from the RBI is called the repo rate.
When the RBI increases the repo rate, the commercial banks in turn increase the rate of interest on loans for the public.
The Reserve Bank of India controls the rate of interest on loans and savings. This is carried out by controling the interest rate at which commercial banks borrow from the RBI. The rate of interest at which the commercial banks borrow money from the RBI is called the repo rate.
When the RBI increases the repo rate, the commercial banks in turn increase the rate of interest on loans for the public.
Suggest Corrections
0
Similar questions
View More
Join BYJU'S Learning Program
Explore more
Join BYJU'S Learning Program
