hi, recently i heard in news that bank rate and repo rate
are cut by 100, 50 basis points what does this mean
excalty, plz explain me this in simply words please, i want
to know it.
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Answer Posted / raghs
In simplest words the banks rate implies the rate at which
the RBI would lend the loans to its child banks which
include all commercial banks, which in turn increase the
money flow in the economy and increase the inflation in its
path but increase the return on the investment. a repo on
the other hand applies to the Repurchase of money market
instrument particularly BOE( bill of exchange) are
repurchesed by RBI any fall in this will have the same
effect discussed above. hope it helps
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