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Repo Rate

What is Repo Rate? How does change in Repo Rate affect economy growth?

What is Repo Rate?

repo rate

Repo rate (also known as Repurchase rate) is the rate at which the Central Bank of the country (in India, RBI is the central bank) lends shot-term money to the banks against their securities. In other words, we can say that the Repo rate is a rate at which banks borrow money from RBI for short periods up to 7 or 14 days. In India, the Repo rate is a similar instrument of monetary policy to inject liquidity in banking system as the discount rate in the United State.

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