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Bank Rates and Monetary Policy

Answer: A

Reverse Repo Rate: The rate at which the RBI is willing to borrow from the commercial banks is called reverse repo rate. If the RBI increases the reverse repo rate, it means that the RBI is willing to offer lucrative interest rate to commercial banks to park their money with the RBI. This results in a reduction in the amount of money available for the bank’s customers as banks prefer to park their money with the RBI as it involves higher safety. This naturally leads to a higher rate of interest which the banks will demand from their customers for lending money to them, thereby causing reduction in liquidity.

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Answer: D

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Answer: C

Purchase and sale of govt securities by RBI. OMOs are conducted by the RBI via the sale/purchase of government securities (G-Sec) to/from the market with the primary aim of modulating rupee liquidity conditions in the market.

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24.

RBI kept repo rates ____ in second bi-monthly monetary policy review.

Answer: C

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Answer: D

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26.

RBI cut repo rate to ___ on Aug 2, 2017.

Answer: C

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27.

Inflation is a sustained increase in the general level of __________.

Answer: C

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28.

The goals of monetary policy do NOT include the promotion of _________________

Answer: B

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29.

RBI governor HR Khan announced a committee to study which technology?

Answer: B

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30.

The Reserve Bank of India will transfer its surplus profit of 65,896 crore rupees to the Centre. This amount is ___ percent higher than previous year.

Answer: C

Last year, the apex bank had transferred 52,679 crore rupees of its surplus profit to the Government.

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