what is repo rate?
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Answer Posted / sanjay mandal.
repo rate is the rate of interest which is fixed by rbi to
lend money to bank & taking bank securites.
reverse repo rate is the rate at which rbi taking out money
from the bank and return the bank security to the bank it
is also decided by rbi itself.
repo rate and reverse repo rate both are decided by rbi to
control thr liqudity in the system.
repo rate increase to inject liqudity in the system and
reverse repo rate decided to taking out money(sucking out)
in the system.
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