Updated on Nov 27, 2019 – 02:28:29 PM
Repo price means the price of which commercial banking institutions borrow funds by offering their securities towards the Central bank of y our nation for example Reserve Bank of Asia (RBI) to keep liquidity, in case there is shortage of funds or as a result of some statutory measures. It really is one of many tools of RBI to help keep inflation in check.
View here to read about: CRR & SLR.
This short article covers the next: 1. How Exactly Does Repo Rate Perform?
Whenever you borrow funds through the bank, the deal draws interest regarding the major quantity. This is certainly described as the price of credit. Likewise, banking institutions also borrow funds from RBI during a money crunch upon which they’ve been needed to spend interest into the Central Bank. This interest is known as the repo price. Read more