analyse the impact of reduction in repo rate by reserve bank of india from 6.25% to 6% on indian households , investors and the indian economy
Dear Student,
Repo rate is the rate at which Reserve Bank of India lends to the commercial banks against government securities. Reduced repo rate means commercial banks are getting money on lower rates from RBI.
Indian households: Due to this , commercial banks will give loans to general public at lower rate as well. General public will get benefit from it as they will be getting loans at low interest and this reduces the burden on them.
Investors: Investors will also get benefit from this as they can avail loans at cheap rates .
Indian economy: Economy will boost due to reduced repo rate . Because due to this money supply, AD, and economic activities in the country will increase and will help the economy to boost.
Hope this information will clear your doubts about this topic.
If you have any more doubts just ask on the forum and our experts will try to help you out as soon as possible.
Regards
Repo rate is the rate at which Reserve Bank of India lends to the commercial banks against government securities. Reduced repo rate means commercial banks are getting money on lower rates from RBI.
Indian households: Due to this , commercial banks will give loans to general public at lower rate as well. General public will get benefit from it as they will be getting loans at low interest and this reduces the burden on them.
Investors: Investors will also get benefit from this as they can avail loans at cheap rates .
Indian economy: Economy will boost due to reduced repo rate . Because due to this money supply, AD, and economic activities in the country will increase and will help the economy to boost.
Hope this information will clear your doubts about this topic.
If you have any more doubts just ask on the forum and our experts will try to help you out as soon as possible.
Regards