RBI reduce REPO rate :Why government reduce REPO rate -2020

Repo Rate and Reverse Repo Rate

Post Date -27-March-2020

What is Repo rate : is the rate in which the RBI lends money to commercial banks for the short term in the event of any shortfall of funds.

Reverse Repo rate -is the rate at which Reserve Bank of India borrows money from commercial banks within the country.

What is impact: If Bank reduces REPO rate then Commercial bank takes a loan from RBI and if the commercial bank takes a loan from low rate then sure commercial also gives the loan on the cheap rate to the customers.Then customers invest money in business then sure hapeen growth of the company

RBI governor announced REPO rate reduce 0.75% means now have 4.40%. This rate is low in the past 15 years

Who takes the Decision-Monetary Policy Committee in which three members are appointed From RBI and remaining, three members are appointed from Government of india (GOI).