Explained: What is Repo Rate and Reverse Repo Rate and How Does it Impacts The Economy

Explained: Reserve Bank of India governor Shaktikanta Das announcing an increase of 50 basis points in the repo rate, the second hike in just over a month. In this video we are explaining what repo rate and reverse repo rate is and how does repo rate and reverse repo rate affects the economy.

Explained: What is Repo Rate and Reverse Repo Rate and How Does it Impacts us: Home loan EMIs are set to rise, with Reserve Bank of India governor Shaktikanta Das announcing an increase of 50 basis points in the repo rate, the second hike in just over a month. In this video we are explaining what repo rate and reverse repo rate is and how does repo rate and reverse repo rate affects the economy at large and common public. Repo stands for ‘Repurchasing Option’. Repo rate is the rate at which the central bank gives loans to commercial banks against government securities. Reverse repo rate is the interest that RBI pays to banks for the funds that the banks deposit with it. Whenever these rates change, there is a direct impact on the economy and also various ripple effects.