RBI uses Reverse Repo Rate to:
Answer
Correct Answer : b ) Absorb Liquidity
Explanation :Reverse Repo Rate is defined as the rate at which the Reserve Bank of India (RBI) borrows money from banks for the short term. It is an important monetary policy tool employed by the RBI to maintain liquidity and check inflation in the economy. The Reverse Repo Rate helps the RBI get money from the banks when it needs it.
Hence, option (b) is correct.
Questions related to the Banking system are asked in various competitive exams like State PCS, UPSC CDS, SSC CGL, SSC CHSL, SSC CPO, RRB NTPC, UP SI, IB ACIO, IBPS PO, IBPS Clerk, SBI PO, etc.
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