Under which of the following circumstances Reserve Bank of India (RBI) raised the Repo rate under Liquidity Adjustment Facility (LAF) from 7.75 to 8 per cent in January 2014?begin{enumerate}item Global uncertainty continues to surround the prospects for some emerging economies.item Domestic fragilities getting accentuated.item Financial market contagion is a clear potential risk.item The CPI inflation is expected to be on the upside risk.end{enumerate} Select the answer from the codes given below: Codes:

BANKING GENERAL KNOWLEDGE

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

Under which of the following circumstances Reserve Bank of India (RBI) raised the Repo rate under Liquidity Adjustment Facility (LAF) from 7.75 to 8 per cent in January 2014?

A	1, 2 and 3
B	2, 3 and 4
C	2, 3 and 4
D	All of the above

Explanation:

Detailed explanation-1: -The Bank Rate is published under Section 49 of the RBI Act, 1934. This rate has been aligned with the MSF rate and, changes automatically as and when the MSF rate changes alongside policy repo rate changes.

Detailed explanation-2: -Accordingly, the MPC decided to increase the policy repo rate by 25 basis points to 6.50 per cent. The MPC also decided to remain focused on withdrawal of accommodation to ensure that inflation remains within the target going forward, while supporting growth.

Detailed explanation-3: -Repo Rate (RR) is the rate at which the Reserve Bank of India (RBI) lends money to commercial banks or financial institutions in India against government securities. The current Repo Rate 2022 is at 4.40%. Changes in Repo Rate affect the flow of money in the market.

Detailed explanation-4: -In this direction, the LAF introduced in June 2000 has now emerged as the principal operating instrument of monetary policy. The LAF enables the Reserve Bank to modulate short-term liquidity under varied financial market conditions in order to ensure stable conditions in the overnight (call) money market.

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