What is Repo Rate & Reverse Repo Rate?

Posted on Aug. 21, 2023, 10:17 a.m.
by Vilas Shetty

REPO Rate is the rate at which Banks borrow money from the Govt in case of shortfall.
Reverse REPO is the rate at which Govt Borrows from Bank.

RBI decides the REPO & Reverse REPO through which it can control the supply of money.
Higher REPO >> High Bank interest >> Less money in market (coz people will borrow less & invest more) & vice versa.