What Is The Difference Between Repo Rate And Repo Rate?

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Monetary Policy
Monetary policy refers to use of instruments under the control of the central bank to regulate the availability, cost and use of money and credit. The goal of monetary policy are achieving specific objectives, such as low and stable inflation and promoting growth. The monetary policy is that wing of economic policy that concern with cost and availability of money in economy is perhaps stating without being informative. In terms of public perception, the way fiscal policy is associated with taxation, monetary policy is perhaps mostly conceived of as interests rate is changes so that one gets more while depositing money in the local bank or pays more while taking a house lone. These actions mostly have to do with commercial banks
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If Reserve Bank of India (RBI) wants to make it more expensive for banks to borrow money, it increases the repo rate. Also, if it wants to make it cheaper for banks to borrow money, it reduces the repo rate.
Difference between Bank Rate and Repo Rate :
Bank Rate and Repo Rate seem to be similar terms because in both of them RBI lends to the banks. A Repo Rate is a short-term measure and it refers to short-term loans and used for controlling the amount of money in the market. On the other hand, Bank Rate is a long-term measure and it is governed by the long-term monetary policies of the Reserve bank of India. The bank rate is the rate of interest which a central bank charges on the loans and advances that it extends to commercial banks and other financial intermediaries. Reserve Bank of India uses this tool to control the money supply.
Role Repo rate:
When RBI reduces the Repo Rate, the banks can borrow more at a lower cost. This contributes to lowering of the rates. Once there are signs of recovery, the RBI increases the rates and moves towards a tight monetary
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This is called as Marginal Standing Facility.
Marginal Standing Facility (MSF) is a new Liquidity Adjustment Facility (LAF) window created by Reserve Bank of India (RBI) in its credit policy of May 2011. MSF is the rate at which the banks are able to borrow overnight funds from Reserve Bank of India against the approved government securities. The question is that the Banks are already able to borrow from RBI via Repo Rate, then why marginal standing facility is needed? Here we that this window was created for commercial banks to borrow from RBI in certain emergency conditions when inter-bank liquidity dries up completely and there is a volatility in the overnight interest rates. To curb this volatility, RBI allowed them to pledge government securities and get more funds from RBI at a rate higher than the repo rate. Thus, overall idea behind the marginal standing facility is to contain volatility in the overnight inter-bank rates. Rate of
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