Know about RBI Repo Rate

Repo rate is the rate at which the central bank of a country (Reserve Bank of India in case of India) lends money to commercial banks in the event of any shortfall of funds. Repo rate is used by monetary authorities to control inflation.

Some Key Points

·        Repo rate is short form of Repurchase Rate

·        The main objective of repo rate is to deal with deficiency of funds.

·        Repo rate is the interest charged by RBI while repurchasing securities sold by commercial banks

·        Repo rate in India is fixed and monitored by India’s Central Banking Institution, The Reserve Bank of India.

·        The repo rate is always higher than the reverse repo rate.

·        Current Repo Rate: 6.25%

compiled by Karthik S.M.K 

Sources: economictimes.indiatimes.com, www.relakhs.com