Explain the term Repo Rate.

1.	Explain the term Repo Rate.
Answer» Repo Rate is that rate at which the central bank of a country lends money to the commercial banks in the event of any shortfall of funds. Repo rate allows repurchase of the securities. The holders of securities can repurchase them at a later date. Therefore, repo rate is also called repurchase rate. Repo rates relates to short-term borrowings by the commercial banks. At present, this rate is 6.25%.

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