Digital Desk, New Delhi. Reserve Bank Governor Shaktikanta Das has not changed the repo rate and reverse repo rate. The Monetary Policy Committee (Monetary Policy Committee) has maintained the repo rate at 4% and the reverse repo rate at 3.35%. That is, there is no change in the repo rate. This was revealed in the announcement of the results of the Reserve Bank’s Monetary Policy Committee (MPC) meeting.
Marginal Standing Facility Rate & bank rate remains unchanged at 4.2% and the reverse repo rate stands unchanged at 3.35%: Shaktikanta Das, RBI Governor https://t.co/rmTmNXPLdE
– ANI (@ANI) October 9, 2020
The absence of change in the corporate means that there will be no new relief on EMI or loan interest rates. Explain that there was no change in the policy rate even in August. However, since February 2019, there has been a big cut of 2.50% in the repo rate.
What is the repo rate?
Repo rate is the rate at which RBI lends to banks. In fact, whenever banks have shortage of funds, they take money from the central bank i.e. the RBI to make up for it. This loan given by RBI is available at a fixed rate. This rate is called repo rate. The Reserve Bank of India decides this on a quarterly basis.
Reverse repo rate
This is the reverse of the repo rate. When banks have a large amount left after a day’s work, then they keep that amount in the Reserve Bank. RBI pays interest on this amount. The rate at which the Reserve Bank pays interest on this amount is called reverse repo rate.