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BANKING AND MONETARY POLICY — Economics STD 12 Commerce — Question

Gujarat BoardEnglish MediumSTD 12 CommerceEconomicsBANKING AND MONETARY POLICY2 Marks
Question
$RBI$ has stopped using bank rate as an instrument to regulate money supply and is using repo and reverse repo rate instead. Why?
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Answer

Bank rate is for long period and thus cannot be changed in a very short period whereas, repo and reverse repo rate can be altered in a very short periods and thus, help to regulate money supply in short term.

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