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SSC GD 2023 PYQ — Question 22

SSC GD Constable (English) - 16 Jan 2023 - Shift 1 • General Awareness • Q22

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The interest rate at which the Reserve Bank absorbs liquidity from banks against the collateral of eligible government securities under the LAF is called the ______.

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Correct answer: D

Explanation

The correct answer is option 4 i.e. Reverse repo rate.

  • The reverse repo rate is the rate at which the Reserve Bank of India borrows funds from the country's commercial banks. This loan is given against the collateral of eligible government securities under LAF.
  • The rate at which commercial banks obtain credit by selling their securities to the Reserve Bank of India (RBI) is known as the repo rate.