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266

Q:

The rate at which RBI lends to commercial banks for the short term is called ________.

  • 1
    repo rate
  • 2
    reverse repo rate
  • 3
    bank rate
  • 4
    cash reserve rate
  • Show Answer
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Answer : 1. "repo rate"
Explanation :

The correct answer is Repo Rate. Key Points. Repo rate is the rate at which the central bank of a country (Reserve Bank of India in case of India) lends money to commercial banks in the event of any shortfall of funds. Repo rate is used by monetary authorities to control inflation.

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