Share
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
30 July 2011
what is meant by repo issue?????
03 August 2011
The repo rate is the difference between the purchase price and reselling price of a security, expressed as a percentage.
If commercial banks are short of money, they enter into an agreement with the Reserve Bank of India to sell their Treasury bills or gilt edged securities and then repurchase these securities at a slightly higher price.
For example, they may sell a treasury bill for Rs100 and then agree to buy it back at Rs105. The repo rate is effectively a 5% interest rate because that is the % difference between the two.
If the Reserve bank of India increases the repo rate it will increase general interest rates throughout the economy.
If the repo rate for commercial banks increases they will pass this onto their own consumers. Higher interest rates have the effect of reducing spending, investment and economic growth. This will reduce inflationary pressures in the economy.
Regards
ALLU
The repo rate is the difference between the purchase price and reselling price of a security, expressed as a percentage.
If commercial banks are short of money, they enter into an agreement with the Reserve Bank of India to sell their Treasury bills or gilt edged securities and then repurchase these securities at a slightly higher price.
For example, they may sell a treasury bill for Rs100 and then agree to buy it back at Rs105. The repo rate is effectively a 5% interest rate because that is the % difference between the two.
If the Reserve bank of India increases the repo rate it will increase general interest rates throughout the economy.
If the repo rate for commercial banks increases they will pass this onto their own consumers. Higher interest rates have the effect of reducing spending, investment and economic growth. This will reduce inflationary pressures in the economy.
Regards
ALLU
Message likes :
1 times
07 August 2011
allu is right.
there rate mainly used by the commercial bank and financial institutions for investments in debt market.
there rate mainly used by the commercial bank and financial institutions for investments in debt market.
Message likes :
1 times
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Showing Gift from relative in ITR for this year
- ITR selection for salaries and capital gain less than L
- Share accounting-->fifo - capital gain - period as per fifo?
- Treatment of Pension ?annuity returns on PMVY
- ITR filing- non tax audit cases- Asstt.Year 2026-2027
- Soyabean hsn code and gst rate
- Regarding IMS Mandatory from 1st July 2026
- NON- SUBMISSION OF LLP FORM 3
- Last year TDS Claim
- Free lancer income
- Capital Gain on EUITY Shares
- Gst invoice numbering and delivery challan numbering
- Standard Deduction claim for EPFO Pension and ICICI Prudential Life Annuity
- Small dealers gst returns filing
- Sales amount in Gstr1
- CG after sale of flat
- E Commerce GSTR1 & 3B how to file
- GST Cancellation without jurisdiction
- Legal Opinion on Registrar's Refusal to Investigate a Society for Non-Renewal and Non-Compliance
- GST Refund_RFD-01
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
