Repo rate

By reducing REPO rate by 100 basis points how much money would have floated in the market? what is the liquidity?

Replies (2)

i can't tell u how much liquidity will be there  But certainly it will boost the liquidity.

The sole purpose of govt behind reducing repo rate is to boost investment and to flow money into the market.

It is hard to say how much liquidity comes to market. the reason is if banks borrow from RBI and lend to institutions than only this money will come into the market.

If banks show no interest in borrowing and lending the money to institutiones than it may not have impressive results.

Whatever be the cause this is aq good step taken by govt to boost liquidity into indian market to curb inflation, to incaurage investors to be faithfull, to lend more money etc etc.

Repo rate is diff from CRR bcz CRR has directly impacted the banks positvely as the banks neednot to maintain the cash reserve with RBI to the extent of CRR cut.

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