RBI Monetary Policy

RBI Monetary Policy

Question: On 7th April 2021, Reserve Bank of India (RBI) has announced its bimonthly policy review. What is current Repo Rate as per the review?
a)4%
b) 3%
c)5%
d) none of the above
Ans: a
Context

  • On April 7, 2021, the Monetary Policy Committee of Reserve Bank of India announced the outcome of its bi-monthly monetary policy review.

Facts

  • Amid elevated inflation Monetary Policy Committee of Reserve Bank of India has kept the accommodative policy stance in deciding the various policy rates.
  • The repo rate has been kept unchanged at 4%.
  • The reverse repo rate has been kept at 3.35%.
  • The MSF rate has been kept unchanged at 4.25%.
  • The Bank rate has been kept unchanged at 4.25%.

Repo Rate

  • The repo rate is the rate at which the Reserve Bank of India lends money to the commercial banks in the country.

Reverse Repo Rate

  • The reverse repo rate is the rate at which the Reserve Bank of India borrows money from the commercial banks in the country.

MSF Rate

  • MSF is Marginal Standing Facility. It is the rate at which RBI lends funds to scheduled banks against Government securities.

Bank Rate

  • Bank Rate is a discount rate at which RBI grants long term loans to commercial banks.

By kameshwar shukla

Reference: https://www.rbi.org.in/