Question

B9. The current Reverse Repo Rate is 2.5%. The difference between repo and reverse repo shall be 250
basis points. RBI increases reverse repo by 150 basis points. What is the new Repo Rate?
(b): 6.5%
(c) 7%
(d) 7.5%​

Answer 1

Answer:

Explanation:

Current Reverse repo rate = 2.5%

New Reverse Repo rate:- 2.5 + 150/100 =2.5+1.5 = 4.0 %

Difference between repo and reverse repo :- 2.5% (converted in %age- 250/100)

So new Repo Rate:- 4% +2.5% =6.5%

Option (b) is correct

Answer 2

Option(b) is the correct answer.

Given,

The current Reverse Repo Rate = 2.5%

The difference between repo and reverse repo = 250 point

RBI increases reverse repo by 150 basis points

To Find,

The new Repo rate =?

Solution,

Increase in reverse repo = 150 points

Increase in reverse repo = 150 / 100 = 1.5%

The difference between repo and reverse repo = 250 points

The difference between repo and reverse repo = 250 / 100 = 2.5%

The new Repo rate = 2.5 + 1.5 + 2.5

The new Repo rate = 6.5%

Hence, the new Repo rate is 6.5%.