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5 Difference between repo rate and …

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5 Difference between repo rate and reverse repo rate

Posted by Amanpreet Kaur 4 years, 9 months ago

CBSE > Class 12 > Economics

1 answers

Sia ? 4 years, 9 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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