Which of the following is an instrument of monetary policy of RBI?I. R

1.	Which of the following is an instrument of monetary policy of RBI?I. Reverse Repo RateII. Corridor1. Both I and II2. Only II3. Only I4. Neither I nor II
Answer» Correct Answer - Option 1 : Both I and II The correct answer is Both I and II. The Reserve Bank of India (RBI) is vested with the responsibility of conducting monetary policy. The primary objective of monetary policy is to maintain price stability while keeping in mind the objective of growth. Price stability is a necessary precondition to sustainable growth. There are several direct and indirect instruments that are used for implementing monetary policy- Repo Rate Reverse Repo Rate Liquidity Adjustment Facility Marginal Standing Facility Corridor Bank Rate Cash Reserve Ratio Statutory Liquidity Ratio Open Market Operations Market Stabilisation Scheme Reverse Repo Rate: The reverse repo rate is the short-term borrowing rate at which RBI borrows money from commercial banks. Corridor: The Marginal Standing Facility (MSF) rate and reverse repo rate determine the corridor for the daily movement in the weighted average call money rate.

Which of the following is an instrument of monetary policy of RBI?I. Reverse Repo RateII. Corridor1. Both I and II2. Only II3. Only I4. Neither I nor II

Answer» Correct Answer - Option 1 : Both I and II

The correct answer is Both I and II.

The Reserve Bank of India (RBI) is vested with the responsibility of conducting monetary policy.
The primary objective of monetary policy is to maintain price stability while keeping in mind the objective of growth. Price stability is a necessary precondition to sustainable growth.
There are several direct and indirect instruments that are used for implementing monetary policy-
- Repo Rate
- Reverse Repo Rate
- Liquidity Adjustment Facility
- Marginal Standing Facility
- Corridor
- Bank Rate
- Cash Reserve Ratio
- Statutory Liquidity Ratio
- Open Market Operations
- Market Stabilisation Scheme

Reverse Repo Rate:
- The reverse repo rate is the short-term borrowing rate at which RBI borrows money from commercial banks.
Corridor:
- The Marginal Standing Facility (MSF) rate and reverse repo rate determine the corridor for the daily movement in the weighted average call money rate.