Full Form of REPO

REPO is used with respect to banks; full form of REPO is repurchase agreement. Under this system a bank can borrow money from RBI with the intention of paying back that money at a future date with interest. REPO rate is fixed by reserve bank of India; current REPO rate is 8 percent. This rate is quite important for maintaining growth and inflation of a country as higher rate would imply that banks will have to borrow at higher rate of interest and therefore they will give loans at even higher rates leading to fall in growth of a country.;

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