An increase in the Bank Rate generally indicates that the

Question

CollectorBabu · Accepted Answer

Correct Answer: Central Bank is following a contractionary monetary policy. The bank rate is the rate which is fixed by RBI at which it re-discounts bills of exchange and government securities held by commercial banks. When RBI increases bank rate, it is called 'dear money policy'. Money becomes costlier. A contractionary monetary policy restricts the money supply and reduces the amount of money banks have to lend.

An increase in the Bank Rate generally indicates that the

Contact Information

Services