A decrease in the gilt repo rate will lead to an increase in the money supply.

Name: A decrease in the gilt repo rate will lead to an increase in the money supply.
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Question

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A decrease in the gilt repo rate makes it cheaper for banks to borrow money by selling government securities back to the central bank with an agreement to repurchase them later at a higher price. This encourages banks to borrow more, thereby increasing the money supply in the economy.

A Decrease in the Gilt Repo Rate Will Lead to an Increase