Consider the following statements:
1. A biodiversity hotspot is a biogeographic region with signifi cant levels of biodiversity with exceptional levels of plant endemism and by serious levels of habitat loss.
2. The term was coined by Conservation International in 1988.
3. There are a total of 36 hotspots in the world, the last addition is the North American Coastal Plain.
4. The current hotspots cover more than 15.7% of the land surface area, but have lost around 85% of their habitat.
Which of the above statements are correct?
(a) 1, 2 and 3 only
(b) 2, 3 and 4 only
(c) 1 and 4 only
(d) 1, 3 and 4 only
Answers
Option C - 1 and 4 only
■ Explanation :-
- Repo Rate is the rate of interest at which the RBI lends short term money to banks. Everything from interest rates on loans to returns on deposits is influenced by repo rate. Reverse Repo Rate is the interest rate at which the RBI borrows money from banks for the short term. Thus, the RBI absorbs surplus money from banks by offering attractive interest rates.
- Recently, RBI announced a slew of monetary measures in order to support the economy amid weak activity.
♢ Reducing the repo rate from 4.4 to 4 percent i.e. a cut in the repo rate by 40 basis points (bps). This allows banks to borrow more money from RBI at low cost and lend money to businesses at a lower interest rate. Hence, statement 1 is correct.
♢ RBI also simultaneously reduced reverse repo rate to 3.75 percent. Low Reverse Repo Rate disincentivizes banks to park money with the RBI. The banks are inclined to put less money into the central bank, as it would fetch lower returns and lend more money to businesses. Hence, statement 2 is not correct.
♢ CRR is the percentage of money banks need to set aside with RBI. CRR has been cut to 3% from 4%.
♢ Under the Marginal Standing Facility (MSF) window, banks can borrow funds from the RBI by pledging government securities within the limits of the Statutory Liquidity Ratio (SLR). The RBI has increased accommodation under the marginal standing facility from 2%of SLR to 3%.
♢ To ease financial stress, RB has announced a moratorium on repayment of loans for six months. Hence, statement 3 is correct.
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