SSC MTS 2024 PYQ — Question 49

The correct answer is option 2 i.e. Increased.

In a hawkish monetary policy stance, the Reserve Bank of India (RBI) usually increases the repo rate. The repo rate is the interest rate at which commercial banks borrow money from the RBI. By raising the repo rate, borrowing becomes more expensive for banks, which in turn reduces credit availability and spending in the economy. This measure helps to control inflation by discouraging excessive demand. A hawkish stance signals the RBI’s focus on price stability over growth, aiming to curb rising prices and maintain economic balance through tighter monetary conditions.