The Reserve Bank of India (RBI) recently announced a hike in some policy rates and also indicated that there may be another change in near future. Which of the following is/are considered a policy rate(s) in the hands of the RBI?begin{enumerate}item repo rateitem SLRitem Inflationend{enumerate}

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

The Reserve Bank of India (RBI) recently announced a hike in some policy rates and also indicated that there may be another change in near future. Which of the following is/are considered a policy rate(s) in the hands of the RBI?

A	Only 1
B	Only 2
C	Only 3
D	Only 1 & (2)

Explanation:

Detailed explanation-1: -The RBI rate hike affects all types of loans, including mortgages, vehicle loans, student loans, personal loans, business loans, credit cards and everything along the same line. A rate increase of any size affects consumers because it makes borrowing money from commercial banks more expensive.

Detailed explanation-2: -Since the Repo rate is hiked the banks will now have to pay a higher amount of interest to the RBI which in turn shall be collected from the retail/ corporate borrowers of the banks. This would result in higher interest outflow on loans taken from the banks. Thus the loans in general will become costlier by 1-2%."

Detailed explanation-3: -When the Reserve Bank of India announces an increase of the Statutory Liquidity Ratio (SLR), what does it mean? A. The Commercial banks will have less ability to inject money into the economy.

Detailed explanation-4: -On the basis of an assessment of the current and evolving macroeconomic situation, the Monetary Policy Committee (MPC) at its meeting today (February 8, 2023) decided to: Increase the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points to 6.50 per cent with immediate effect.

There is 1 question to complete.