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what is the effect of repo rate
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Answer / chalapathi rao govada
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.
One more clarification ot you as a value addition........
Reverse Repo rate:
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 this attractive interest rates. It can cause
| Is This Answer Correct ? | 84 Yes | 6 No |
Answer / subhash
But bank rate is also the rate at which banks borrow money
from the RBI.Then what exactly the difference between bank
rate & repo rate.
| Is This Answer Correct ? | 16 Yes | 7 No |
Answer / monika
Increase in repo rate make the loan costly for general public. bcoz the repo rate is the rate at which commercial banks take loan from RBI and the money which they get is given to general public at high rate of interest. ex- repo rate is 7% then the loans of different kinds will be costly.
| Is This Answer Correct ? | 4 Yes | 0 No |
Answer / deepak
bank rate is the rate at which banks discount their bills,
not at which it borrowa from RBI which is repo rate
| Is This Answer Correct ? | 3 Yes | 2 No |
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