Economics · Monetary Policy

How does the Reserve Bank of India (RBI) utilize the repo rate to control inflation?

Verified Solution4 OptionsUpdated: October 2026👁️1 View

1By decreasing the repo rate to encourage consumer spending
2By increasing the repo rate to make borrowing more expensive for commercial banks✓
3By offering subsidies on commercial loans
4By decreasing the repo rate to increase money supply

Correct answer

By increasing the repo rate to make borrowing more expensive for commercial banks

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