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Q » Explain repo rate and reverse repo rate.
06 Dec, 2025
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A » The repo rate is the interest rate at which central banks lend money to commercial banks, influencing liquidity and economic activity. Conversely, the reverse repo rate is the rate at which commercial banks park excess funds with the central bank, helping control inflation and stabilize the economy. Both rates are crucial monetary policy tools utilized by central banks to manage the availability of money and maintain financial stability.
06 Dec, 2025
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