On Friday, March 27, India’s Central Bank, The Reserve Bank of India reduced the Repo Rate and Reverse Repo Rate in order to tackle the economic slowdown India is facing due to the coronavirus. India has been under a total lock down and only essential services are open to consumers, this has led to production of a lot of goods and services being put at a standstill since workers cannot travel to their workplace, leading to a shortage of goods and services forcing many retailers to sell goods at higher prices. The repo rate is the rate at which the commercial banks borrow money from the central bank. The reverse repo rate is the rate at which the central banks borrow money from the commercial banks, commercial banks may park their excess money there. Both the repo and reverse repo rate are a part of the monetary policy which controls the interest rate and money supply in the country. The new repo rate is set at 4.40% and this has been t...
By the students of Indus International School