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what is reverse repo?
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REVERSE REPO IS THE RATE AT WHICH THE RBI PAY INTRESTED TO
ITS BORROWING FROM BANKS.REPO RATE IS THE RATE AT WHICH THE
RBI CHARGES INTRESTED ON ITS LENDING TO BANKS.
| Is This Answer Correct ? | 33 Yes | 4 No |
Answer / hemant
This is the rate at which RBI Borrow money from banks .
| Is This Answer Correct ? | 16 Yes | 3 No |
Answer / praneek
Reverse Repo rate is the rate at which Reserve Bank of India (RBI) borrows money from banks. Banks are always happy to lend money to RBI since their money are in safe hands with a good interest. An increase in Reverse repo rate can cause the banks to transfer more funds to RBI due to the attractive interest rates. It can cause the money to be drawn out of the banking system.
| Is This Answer Correct ? | 3 Yes | 0 No |
Answer / dayasagar s
A repo agreement is the sale of a security with a commitment to
repurchase the same security as a specified price and on specified
date while a reverse repo is purchase of security with a commitment
to sell at predetermined price and date. A repo transaction
for party would mean reverse repo for the second party. In liew
of the loan, the borrower pays a contracted rate to the lender,
which is called the repo rate. As against the call money market
where the lending is totally unsecured, the lending in the repo is
backed by a simultaneous transfer of securities. The main
players in this market are all institutional players like banks,
primary dealers like PNB Gilts Limited, financial institutions,
mutual funds, insurance companies etc. allowed to operate a
SGL with the Reserve Bank of India.
Further RBI also operates daily repo/ reverse repo auctions to
provide a benchmark rates in the markets as well as managing in
the liquidity in the system. RBI sucks or injects liquidity in the
banking system by daily repo/ reverse operations.
| Is This Answer Correct ? | 3 Yes | 1 No |
Answer / sandy mba
Reverse repo rate is the rate at which the commercial banks
deposite their money with RBI.
| Is This Answer Correct ? | 1 Yes | 0 No |
Answer / sonali
When a seller enters into a Repo agreement i e he sells a
instrument to the buyer with an agreement to buy it agn in
future at specified date and price, the same transaction
frm buyer's point of view is called as reverse repo i e the
buyer buys an instrument with an agreement to sell it back
to the seller at specified date and price.
| Is This Answer Correct ? | 12 Yes | 16 No |
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