5 Difference between repo rate and …
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Sia ? 6 years, 4 months ago
Repo rate is the rate of interest at which central bank lends money to commercial banks for short period. Increase in Repo rate reduces the money supply in the economy and vice versa.
Reverse Repo rate is the rate at which central bank of a country borrows money from commercial banks. It is fixed by the central bank. Increase in Reverse Repo rate reduces the money supply in the economy. Decrease in this rate will increase the money supply in the economy.
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