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Repo And Reverse Repo Rate

Consider the following statements with reference to the Repo and Reverse Repo Rate:

  1. When the RBI needs to pump funds into the system, it lowers the repo rate.
  2. Reverse Repo is often used in times of high levels of inflation in the economy.
  3. If the repo rate increases, it means banks are getting funds from RBI at a higher cost. This, in turn, will mean that banks will also lend to others at a higher cost.

Which of the statement(s) given above is/are correct?

A
Only 1
B
2 and 3
C
Only 3
D
1, 2 and 3