The Reserve Bank of India (RBI) today hiked repo rate by 25 basis points or 0.25 per cent to 7.75 %. This is likely to make home, auto and consumer loans costlier.
Repo rate is the rate at which the Reserve Bank of India lends money to commercial banks. This acts as a disincentive for banks to borrow money from the RBI. This ultimately reduces the money supply in the economy and thus helps in arresting inflation.
Repo rate has been used by monetary authorities to control inflation.RBI Governor Raghuram Rajan has continued on the lines of his predecessor, D Subbarao to hike rates to fight inflation.
Repo rate is the rate at which the Reserve Bank of India lends money to commercial banks. This acts as a disincentive for banks to borrow money from the RBI. This ultimately reduces the money supply in the economy and thus helps in arresting inflation.
Repo rate has been used by monetary authorities to control inflation.RBI Governor Raghuram Rajan has continued on the lines of his predecessor, D Subbarao to hike rates to fight inflation.
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