How Bank Rate is different from Repo rate?
How Bank Rate is different from Repo rate?
[A]While Repo Rate is a short-term measure, Bank Rate is a long-term measure
[B]While Bank Rate is a short-term measure, Repo Rate is a long-term measure
[C]While Repo Rate is used to control money supply, Bank Rate is used to control inflation
[D]While Bank Rate is used to control money supply, Repo Rate is used to finance government debt
While Repo Rate is a short-term measure, Bank Rate is a long-term measure
Bank Rate and Repo Rate seem to be similar terms because in both of them RBI lends to the banks. Repo Rate is a short-term measure and it refers to short-term loans and used for controlling the amount of money in the market. On the other hand, Bank Rate is a long-term measure and is governed by the long-term monetary policies of the RBI.