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Which statement best explains Repo rate?

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Question ID #27214 UPSC UPSC EPFO APFC 2026 Mock Test Series UPSC EPFO APFC 2026 Full-Length Mock Test 7 Medium

Which statement best explains Repo rate?

Correct Answer: B. Rate at which RBI lends short-term funds to banks against eligible collateral under the liquidity framework
Repo rate: Rate at which RBI lends short-term funds to banks against eligible collateral under the liquidity framework

Question: Which statement best explains Repo rate?

A. Index tracking price changes at the wholesale level for a basket of goods

B. Rate at which RBI lends short-term funds to banks against eligible collateral under the liquidity framework

C. Market-driven fall in the rupee's value relative to another currency

D. Fiscal deficit minus interest payments

Correct Answer: B. Rate at which RBI lends short-term funds to banks against eligible collateral under the liquidity frameworkRepo rate: Rate at which RBI lends short-term funds to banks against eligible collateral under the liquidity framework

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Which statement best explains Repo rate? - MCQ Explanation

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Correct answer: B. Rate at which RBI lends short-term funds to banks against eligible collateral under the liquidity framework