Multiple choice

The Reserve Bank of India reduced which of the following rates by 25 basis' points in October 2012?

  1. Repo rate

  2. Cash Reserve Ratio

  3. Statutory Liquidity Ratio and Repo Rate

  4. Repo Rate and Cash Reserve Ratio
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

In October 2012, RBI reduced the Cash Reserve Ratio (CRR) by 25 basis points to inject liquidity into the banking system. The repo rate was left unchanged at that time. CRR is the portion of deposits banks must maintain with RBI, and reducing it increases funds available for lending.

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