RBI gave relief to common people amid price inflation
RBI gave relief to common people amid price inflation
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New Delhi: After a 3-day meeting of the Monetary Policy Committee, Reserve Bank of India Governor Shaktikanta Das announced the decisions taken on interest rates. the RBI has given relief to the common people who are facing the brunt of inflation and have decided not to raise interest rates on loans. Shaktikanta Das said that RBI has not changed the repo rate in any way and has kept it at 4 per cent.

At the same time, RBI has also decided to keep the reverse repo rate unchanged and will remain at 3.35 per cent this quarter. That is the 9th consecutive time that there has been no change in the repo rate. Earlier, the Reserve Bank of India had reduced the repo rate in May 2020. This level of repo rate is the lowest level since April 2001.

What are Repo and Reverse Repo rates?
The rate at which the Reserve Bank of India lends to banks is called the repo rate. It is with this loan that banks lend to their customers. This means that interest rates on loans are lower when the repo rate is low and banks can raise interest rates when the repo rate increases. On the other hand, the reverse repo rate is exactly the opposite of the repo rate and is the rate at which the bank pays RBI interest on deposits. Liquidity means cash is controlled in the markets through a reverse repo rate.

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