Current Affairs Question - 12 February 2020

Explanation :

• Repo Rate, or repurchase rate, is the key monetary policy rate of interest at which the central bank or the Reserve Bank of India (RBI) lends short term money to banks, essentially to control credit availability, inflation, and the economic growth.
• Repo Rate in India is the primary tool in the RBI’s Monetary and Credit Policy.
• Other policy rates, such as Reverse Repo Rate and Marginal Standing Facility Rate, are often directly linked with the Repo Rate of RBI.
• A Repo transaction for a day is known as an Overnight Repo. In such an agreement, banks sell securities to the RBI for money, and repurchase those the following day, thus, returning the money to the central bank.
• Repo Rate is the most significant rate for the common man too. Everything from interest rates on loans to returns on deposits is influenced by this crucial rate set by the RBI, which is why interest rates on home loans, car loans and other kinds of borrowings go up and down based on the direction of Repo Rate change.