SSC MTS 2023 PYQ — Question 67

The correct answer is option 2 i.e. Rate at which RBI borrows money from commercial banks.

• The reverse repo rate is the interest rate at which a central bank, such as the Reserve Bank of India (RBI), borrows money from commercial banks within the country.
• It is used as a monetary policy tool to control liquidity and inflation in the economy by incentivizing banks to park excess funds with the central bank. A higher reverse repo rate encourages banks to lend more to the central bank rather than in the market, thus reducing the money supply.