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Q.

The ____________ is the minimum rate at which the central bank lends money to commercial banks.

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a

Repo rate

b

Marginal cost of funds-based lending rate

c

Base rate

d

Bank rate

answer is B.

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Detailed Solution

Repo Rate: It is the interest rate at which the central bank of a country lends money to commercial banks. The central bank in India i.e. the Reserve Bank of India (RBI) uses the repo rate to regulate liquidity in the economy.

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