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There will be more liquidity in the system. So it will fuel growth as well as Inflation.
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Simple definition of Repo Rate?
Repo rate is the rate at which RBI lends money to scheduled banks. Its also called Repurchase rate. Reverse Repo Rate is the rate at which RBI borrows money from banks.
How repo rate used as a tool to control inflation?
Whenever the banks have any shortage of funds they can borrow it from RBI. Repo rate is the rate at which our banks borrow rupees from RBI. A reduction in the repo rate will help banks to get money at a cheaper rate. When the repo rate increases borrowing from RBI becomes more expensive. Hence, When the repo rate is hiked, the bank gets loan at a higher interest rate from RBI, and henceforth Banks give loan to retail customer/ corporate customer at a more higher rate, so demand for the loan from the customers of bank decreases decreases and there is less money in the market. Since, the liquidity of the marked is sucked by increasing Repo Rate, public can't afford to pay more for any particular commodity, and hence the inflation of the economy gets controlled.
Monetary policy of India?
means latest crr, repo rate,revers repo rate, bank rate ,slr
What is reporate?
What is a repo rate
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 the repo rate and reverse repo rate from aug 2011?
repo rate is 8%. reverse repo rate is 7%
Impact of recession?
high interest rates such as the repo rates and high inflation rate
What is the present repo rate and reverse repo rate of RBI?
Repo rate is 7.25 reverse Repo is 6.25
What is the current repo rate and reverse repo rate in india?
The current Repo Rate is 6.5% and that of Reverse Repo Rate is 5.5%. While the Bank Rate is 6.00% ..
What is reserve repo rate?
what is reserve repo rate
Why has the Repo rate taken precedence over the bank rate as a short term?
Repo rate is basically to fulfill the short term fund requirements of the firms.By increasing repo rate the central bank tries to absorb liquidity from the economy,but it does not directly affect the market interest rate as banks try to bear the burdenof additional money them selves in order not to loose customers as the other banks might be less dependent on repo rate and might not increase the interest rate on lending. But an increase in bank rate makes credit directly dearer for the banks and as it is long term in nature so banks increase their interest rate on lending, which reduces plannned aggregate investment in the economy and thus hampers growth directly.Repo rate increase might also affect investment but the impact is not that severe and direct as bank rate.As the central bank has to maintain a balance between the growth and inflation rate, so it is trying to control inflation by taking other monetary measures that does not affect the growth of the economy directly.
Current repo rate?
current repo rate is 8.5%
Under liquidity adjustment facility RBI injects funds in the system at what rate?
RBI will inject fund into the economy by using Reverse Repo rate.
What is Repo Rate Reverse Repo Rate?
http://wiki.answers.com/Q/What_is_reverse_repo_rate" •This is the rate at which the RBI borrows funds from banks when it wants to suck out liquidity in the economy. It is the rate RBI offers to the banks for parking their surplus funds.
How many differences between repo rate and reverse repo rate?
Assuming the State Bank of India, the spread between repo rate and reverse repo rate has trended towards 1.00%.
What is CRR rate by RBI of India?
the Repo rate, Reserve repo rate and CRR as of 03 January 2009 are as follows: Repo Rate: 5.6% CRR: 5% Reverse Repo rate: 4.1% Source: RBI
What is repo rate?
the repo rate is the rate that the reserve bank lends money to commercial banks
