Multiple choice

To make the cost of credit costlier, which of the following is/are done by RBI?

  1. Decrease the bank rate

  2. Increase the repo rate

  3. Increase the SLR

  4. All of the above
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

To curb inflation, RBI increases repo rate which will make borrowing costly for banks. Banks will pass this increased cost to their customers which makes borrowing costly in the whole economy.

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