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SSC CHSL 2022 PYQ — Question 37

SSC CHSL - 26 May 2022 - Shift 3 • General Awareness • Q37

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

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Correct answer: A

Explanation

The correct answer is option 1 i.e. repo rate.

  • Repo rate is defined as the rate of interest at which the Reserve Bank of India (RBI) lends money to commercial banks. 
  • ''Repo'' stands for Repurchase Agreement or Repurchasing Option.
  • This is done when banks face a shortage of funds or need to maintain liquidity in volatile market conditions.
  • The RBI uses the repo rate to control inflation rates.