RBI did not increase the repo rate, know how repo rate affects the common man
RBI Repo Rate: Just as we take loans from banks for our needs, in the same way, banks also take loans from the Reserve Bank for their needs. The rate or rate at which the Reserve Bank gives loans to banks is called Repo Rate.
reserve Bank of India (RBI) Governor Shaktikanta Das announced to keep the repo rate stable at 4.0 percent in the RBI monetary policy meeting today. Let us tell you that this is the 11th consecutive time when RBI has changed the repo rate. (Repo Rate) No changes have been made in . Apart from the repo rate, the reverse repo rate has also been kept constant at 3.35 percent. The RBI Governor said on Friday that the country’s economy still needs strong support, in view of which no change is being made in the repo rate. He told that the country’s economy is currently facing two challenges simultaneously. On the one hand, inflation is increasing continuously across the country and on the other hand the growth rate is declining.
What is the repo rate and it affects the common man
Just as we take loans from banks for our needs, in the same way, banks also take loans from the Reserve Bank for their needs. The rate or rate at which the Reserve Bank gives loans to banks is called Repo Rate. If the Reserve Bank increases the repo rate, then the loans you get by the bank like home loan, car loan, personal loan also become expensive.
What is reverse repo rate
The way we deposit our savings in the bank and the bank gives us interest for it. Similarly, the bank also deposits its savings amount with the Reserve Bank of India, on which the Reserve Bank pays interest to those banks. This interest is called reverse repo rate.
How Reverse Repo Rate Affects Common Man
The point to be noted here is that whenever cash starts increasing in the market, it directly affects inflation. It simply means that when there is an increase in cash in the market, then inflation also starts increasing. In such a situation, the Reserve Bank increases the reverse repo rate, due to which the rest of the banks deposit more and more cash with them to increase the interest received on their savings amount.
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