RBI Credit Policy: RBI has not changed the repo rate and reverses the repo rate. TODAY, the RBI governor said the repo rate would remain at 4% and the reverse repo rate at 3.35%. With this, the RBI governor has estimated 10.5% GDP for the year 2021-22.
RBI Credit Policy
Presenting the monetary policy, the RBI governor said, “Despite Corona, the country’s economic situation is improving. The way matters have increased, there has been a little uncertainty. But India is ready to meet the challenges.” There be no change in the repo rate and reverse repo rate in the monetary policy review held on February 5. Even then, the repo retained the repo rate at 4% and the reverse repo rate at 3.35 per cent.
There were already indications of this from the market experts. Experts said that the Reserve Bank was taking a soft stance on monetary policy given rising inflation, retaining the scope of the government’s inflation target (at two per cent with a two per cent increase) and increasing cases of Kovid-19 transition. Can maintain status quo.
What is a repo rate, what is a reverse repo rate?
The rate at which RBI gives loans to commercial banks and other banks is called the repo rate. The low repo rate means that all types of loans from the bank will become cheap. This also increases the interest rate on your deposit.
The rate at which the banks receive interest on the money deposited in the RBI on their behalf is called the Reverse repo rate. The additional cash held by the banks is deposited with the Reserve Bank. Banks also get interested in this.
How does repo rate and reverse repo rate affect the loan of banks?
Repo rate and reverse repo rate are interlinked. On the one hand, by reducing the reverse repo rate, the RBI leaves more money with the banks to give more loans. On the other hand, by reducing the repo rate, banks provide loans at cheaper rates, which the banks can benefit their customers.