Current Reverse Repo Rate
On March 20, 2013, RBI has lowered Repo RateRepo rate, or repurchase rate, is the rate at which RBI lends to banks for short periods. This is done by RBI buying government bonds ..... by 25 basisIn a futures market, basis is defined as the cash price (or spot price) of whatever is being traded minus its futures price for the ..... points from 7.75% to 7.50%. The objective is ease pressure on the reviving economyeconomy. Accordingly, the Reverse RepoReverse repo rate is the rate of interest at which the RBI borrows funds from other banks in the short term. This is done by ..... Rate under the Liquidity Adjustment Facility (LAF)Liquidity Adjustment Facility
Liquidity Adjustment Facility is the primary instrument of Reserve Bank of India for modulating liquidity and transmitting interest rate signals to ....., which is determined with a spread of 100 basis points below the repo rate, has got calibrated to 6.50%.
At the same time, the Marginal Standing Facility (MSF) rate, which is determined with a spread of 100 basis points above the repo rate is adjusted to 8.50%.
How Reverse Repo Rate Works?
When the RBI increases the Reverse Repo, it means that now the RBI will provide extra interest on the money which it borrows from the banks. An increase in reverse repo rate means that banks earn higher returns by lending to RBI. This indicates a hike in the deposit rates.