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Which statement best explains Reverse repo?

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Question ID #26408 UPSC UPSC EPFO APFC 2026 Mock Test Series UPSC EPFO APFC Indian Economy Sectional Test 2026 Medium

Which statement best explains Reverse repo?

Correct Answer: D. Mechanism or rate historically used by RBI for absorbing liquidity from banks
Reverse repo: Mechanism or rate historically used by RBI for absorbing liquidity from banks

Question: Which statement best explains Reverse repo?

A. Systematic record of a country's economic transactions with the rest of the world

B. Market value of final goods and services produced within a country during a given period

C. RBI facility for absorbing liquidity without collateral

D. Mechanism or rate historically used by RBI for absorbing liquidity from banks

Correct Answer: D. Mechanism or rate historically used by RBI for absorbing liquidity from banksReverse repo: Mechanism or rate historically used by RBI for absorbing liquidity from banks

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Which statement best explains Reverse repo? - MCQ Explanation

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Correct answer: D. Mechanism or rate historically used by RBI for absorbing liquidity from banks