Economics · Monetary Policy
Which of the following statements is INCORRECT with respect to repo rate?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1It is the rate at which the commercial banks borrow funds from the RBI by pledging government securities.
- 2It is the rate at which banks place their surplus funds with the RBI and receive collateral.✓
- 3It is a policy rate which is the key lending rate of the central bank, and its nomenclature varies from country to country.
- 4It is a single policy rate to signal the stance of monetary policy to achieve macro-economic objectives of growth with price stability.
Correct answer
It is the rate at which banks place their surplus funds with the RBI and receive collateral.
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