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Q:

What is the primary objective of the repo rate?

  • 1
    To regulate the money supply in the market and to combat price inflation.
  • 2
    To determine operating bank rates.
  • 3
    Increasing availability of funds for banks.
  • 4
    Stimulating consumer demand.
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Answer : 1. "To regulate the money supply in the market and to combat price inflation."
Explanation :

Repo rate is the interest rate at which banks borrow funds from the RBI to address short-term liquidity gaps.

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