Indian Economy Current Affairs Analysis
The Reserve Bank of India (RBI) reduced the repo rate by 25 basis points, bringing it down to 6%.
About Repo Rate
iThe repo rate is the interest rate at which the RBI lends short-term funds to commercial banks against government securities.
iiIt serves as a primary tool for the RBI to regulate liquidity, control inflation, and influence overall economic activity.
iiiBy adjusting the repo rate, RBI can either encourage banks to borrow more (by lowering the rate) or discourage borrowing (by raising the rate), thus influencing the money supply in the economy.
Impact of RBI Repo Rate Cut
iLower Borrowing Costs
iiFixed Deposit (FD) Interest Rates
iiiEnhanced Credit Flow
ivBoost to Real Estate and Infrastructure
vSupport Amid Global Challenges