The repo rate refers to the rate at which central banks lend short-term credit to commercial banks in exchange for collateral . Its purpose is to deal with the shortage of funds faced by banks in the financial market. The repo rate is a useful instrument for central banks to regulate the money supply in a market. The repo rate, or repurchase rate, is the rate at which central banks lend to commercial banks , usually against government securities. It is an essential monetary policy tool, affecting the money supply and overall economic activity. Repo Rate is an important tool utilized by central banks such as the Reserve Bank of India (RBI), to control and manage the frequency of funds and financial status in the economy of the nation. The repo rate is also referred to as the repurchase rate . Learn the meaning of repo rate , who decides it, and its impact of loans, EMIs, and the Indian economy. The repo rate is one of the most important terms in banking and finance, often making...
