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CRR - Refers to Cash Reserve Ratio CRR is nothing but the amount of cash the banks need to deposit with the central banks. This is to ensure that the banks do not lend out all the depositors money. This is used by the banks to meet their day to day cash requirements. For example if you deposit $1000 with ABC bank the bank would have to deposit $100 with the central bank (If CRR is 10%) It can lend only the remaining 90% of the money Repo Rate - The Rate of Interest at which the central banks lend money to its member banks is called Repo rate. CRR and Repo rate are two factors that can influence the cash liquidity in the country's economy and also other factors like inflation. The central banks aim is to ensure that there is enough liquidity in the economy to influence the country's growth and at the same time to ensure that the country's inflation is maintained at acceptable limits. If the CRR & Repo rate are increased then the amount of free cash at the bank's disposal comes down. The interest that the banks have to pay the central banks on their borrowings would go up. As a result of which the liquidity in the economy comes down. Lesser loans would be available and the spending power of the public would come down. If the CRR & Repo rate are decreased then the amount of free cash at the banks disposal goes up. Cash is available cheap for the banks. Hence they would lend freely to the public. Recently because of the subprime crisis, the central banks across the world have been cutting down the CRR and the Repo rate. This is to ensure that more money is available for the public to spend. This would in turn help the world economy stabilize after the beating it has taken because of this crisis...
What else can I help you with?
What is current rapo rate and reverse rapo rate?
dear sir rbi current rapo and rev. rapo augst 2012 tell me
What is rapo rate and reverse rapo rates?
dear sir rbi current rapo and rev. rapo augst 2012 tell me
How does the central banks control the interest rate?
Central banks control interest rates by altering the repo rate. Repo rate is the rate at which banks borrow money from the central bank. So if the central bank hikes the repo rate, the banks will automatically hike their lending rates. similarly if the central bank reduces the repo rate, banks will lower their lending rates too.
How does the central banks control the interest rates?
Central banks control interest rates by altering the repo rate. Repo rate is the rate at which banks borrow money from the central bank. So if the central bank hikes the repo rate, the banks will automatically hike their lending rates. similarly if the central bank reduces the repo rate, banks will lower their lending rates too.
What is Rapo Rate?
As banks need capital for their operations & they may undergo some financial crisis. At that time banks borows money from RBI at certain rate that rate of borowing in known as REPO RATE. In some cases if bank have excess amount they deposit their amount with RBI. the rate of intrest banks get paid by RBI is REVERSE REPO RATE. Reporate Plays important role in liquidity & Inflation.
What is full form of reverse repo rate?
Repo Rate - also called Bank rate is the rate at which central banks lend loans to the member banks of a country. This rate actually impacts the rate at which these member banks grant loans to their customers Reverse Repo Rate - is the reverse of repo rate and is the interest the central bank would pay its member banks.
Repo and reverse repo?
Repo Rate - also called Bank rate is the rate at which central banks lend loans to the member banks of a country. This rate actually impacts the rate at which these member banks grant loans to their customers Reverse Repo Rate - is the reverse of repo rate and is the interest the central bank would pay its member banks.
What are Repo and Rerepo rates?
Repo Rate - also called Bank rate is the rate at which central banks lend loans to the member banks of a country. This rate actually impacts the rate at which these member banks grant loans to their customers Reverse Repo Rate - is the reverse of repo rate and is the interest the central bank would pay its member banks.
What is repo rate and reverse repo rate of RBI?
Repo Rate - also called Bank rate is the rate at which central banks lend loans to the member banks of a country. This rate actually impacts the rate at which these member banks grant loans to their customers Reverse Repo Rate - is the reverse of repo rate and is the interest the central bank would pay its member banks.
What is a bank repo rate?
A bank repo rate is the rate at which a central bank lends money to commercial banks in the event of a shortfall of funds. It is a tool used by central banks to control money supply in the economy. The repo rate influences interest rates for loans and deposits in the banking system.
What is the bank Repo rate in India?
Repo Rate - also called Bank rate is the rate at which central banks lend loans to the member banks of a country. This rate actually impacts the rate at which these member banks grant loans to their customers.
What is Difference between Base Rate and prime rate?
The prime rate is the rate at which the central bank lends to the commercial banks whiles the base rate is the rate at which the commercial banks lend to the public
