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As you know that for the last few months, inflation in India is at its peak, day by day inflation is increasing, in such a situation, people have come to their lowest level after suffering from these houses, so the same government is also in such a situation. It is very much troubled that the Reserve Bank of India, which is going to the center point of the country’s economy, is making every effort to reduce these brothers, due to which increasing population and unemployment, as well as repo rate and reverse repo rate, are also involved in these inflation. Reasons are being sought, due to which inflation has reached its high level in the last few years, so let us tell you what is this repo rate and reverse repo rate and what is its relation to inflation.

What is Repo Rate and Reverse Repo Rate?

With the help of Repo Rate and Reverse Repo Rate by the Reserve Bank of India, the work of controlling the liquidity in the financial system in India is done so that the high rate of inflation can be controlled and such a method has been created so that the inconvenience caused to the common man can be avoided. be saved. Along with this, let us tell you that the repo rate is the rate that all the commercial banks under India take loans or borrow from the Reserve Bank of India, for which this one repo rate is made six. The same reverse repo rate is the interest rate that the Reserve Bank withdraws money from those commercial banks at its rate, we know them as reverse repo rate. Reverse repo rate is always higher with the help of which inflation can be controlled and the fund inflows can be increased or decreased and with the help of reverse repo rate, cash flow is controlled.

Repo Rate और Reverse Repo Rate

As told to you that the financial system is managed by the Reserve Bank of India with the help of Repo Rate and Reverse Repo Rate, as well as prevention of rising inflation in the country, Repo Rate and Reverse Repo Rate The management of the decrease or increase in the amount is in the hands of the RBI, which it does in view of inflation. If the repo rate increases or is higher, then the commercial banks get loans from the Reserve Bank at a higher interest rate and accordingly they distribute the loan among the general public at a higher rate of interest, the same rate to rate if banks at a lower interest rate. If it is provided to the general public, then it will also provide personal loan to the common people at low interest rate, so inflation will also be less.

How RBI checks inflation

As we know that a name gets liquidity only when the interest rate decreases due to which more amount of money is managed with 1 people and their willingness and ability to buy them increases continuously and if the demand increases then Inflation will definitely increase, in such a situation, RBI has to intervene and control inflation, what it does is that it increases the report, due to which the liquidity which is there decreases and inflation also comes under its control, do not do it too much The bad effect was seen, at that time the Reserve Bank had increased the liquidity by reducing the repo rate, due to which economic growth was seen to accelerate, so this is the way of RBI to check inflation.

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