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The rate at which the RBI lends money through a repurchase agreement is the
Arepo rate
Breverse repo rate
Cbank rate
Dstatutory rate
Answer & Solution
Correct answer: A. repo rate
1. In a repo, the RBI buys a security with an agreed date and price for resale.
2. Money flows to the banking system for that period.
3. The interest on that lending is the **repo rate**.
4. The reverse repo rate applies when the RBI withdraws money instead, which is the mirror operation.
_Source: NCERT Class 12 Introductory Macroeconomics, Ch 3 "Money and Banking", section 3.4 POLICY TOOLS TO CONTROL MONEY SUPPLY_
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