+ Post a Comment HERE!   + Ask a Question / Post a Topic
Results 1 to 2 of 2

What are Repo Rate and Reverse Repo Rate?

Advert.

  1. #1
    SudhirPal's Avatar
    SudhirPal
    SudhirPal is offline eTI Member

    What are Repo Rate and Reverse Repo Rate?

    Advert.
    Hi,
    what are the repo rate and the reverse repo rate in banking industry, please answer it quickly.

  2. #2
    Anand mohan's Avatar
    Anand mohan
    Anand mohan is offline eTI Copper
    Hi,
    Good Ricky studying a lot, answer to your query is

    1). Repo (Repurchase) rate: is the rate at which the RBI lends shot-term money to the banks against securities. When the repo rate increases borrowing from RBI becomes more expensive. Therefore, we can say that in case, RBI wants to make it more expensive for the banks to borrow money, it increases the repo rate; similarly, if it wants to make it cheaper for banks to borrow money, it reduces the repo rate.

    2).Reverse Repo rate : is the rate at which banks park their short-term excess liquidity with the RBI. The banks use this tool when they feel that they are stuck with excess funds and are not able to invest anywhere for reasonable returns. An increase in the reverse repo rate means that the RBI is ready to borrow money from the banks at a higher rate of interest. As a result, banks would prefer to keep more and more surplus funds with RBI.

    Hope you understand

+ Post a Comment HERE!

Similar Topics and Discussions

  1. low call rate for idea
    By anamika24 in forum Idea Mobile
  2. What is the growth rate of Livestock Farming in India right nw
    By lstworld in forum Indian Business & General Market Forum
  3. How would you rate the Honda CBF Stunner???
    By anupam_iwin in forum India Bike & scooters Market Forums.
  4. rate of tvs APACHE
    By karthik. vetsa in forum India Bike & scooters Market Forums.
  5. Growth rate (CAGR) of 38.4%
    By finizard in forum Indian Stock Market Discussion

Tags for this Thread

X
Have Question? Ask now free!