Repo Rate

REPO

August 19, 2018
Repo Rate
6.50%
   0.25% on Aug 01, 2018
Reverse Repo Rate
6.25%
   0.25% on Aug 01, 2018

Major Monetary Policy Rates And Reserve Requirements

Index
Rate    
Effective Date
6.50%
Aug 01, 2018
6.25%
Aug 01, 2018
6.75%
Aug 01, 2018
4.00%
Feb 09, 2013
19.50%
Oct 14, 2017
(Source: RBI)

Chart of Repo Rate

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Source: Reserve Bank of India

Current Repo Rate and Reverse Repo Rate

The current Repo Rate is 6.50% and Reverse Repo Rate is 6.25%

. The Repo Rates last witnessed a change in its level on August 01, 2018 when Repo Rate rose by 0.25% from its previous level of 6.25%. and the Reverse Repo Rate rose by 0.25% from its previous level of 6.00%.

As of today, i.e. on August 19, 2018, the Policy Rates which include Repo Rate stood at 6.50%, Reverse Repo Rate at 6.25%, Marginal Standing Facility (MSF) Rate at 6.75% and Bank Rate at 6.75%. The Reserve Ratios which include Cash Reserve Ratio (CRR) stood at 4.00% and the Statutory Liquidity Ratio (SLR) at 19.50%, according to data of Major Monetary Policy Rates and Reserve Requirements released by the Reserve Bank of India.


Repo Rate Comparision Chart

Repo Rate Vs
Repo Rate Comparision Chart
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Source: Reserve Bank of India

What is Repo Rate?

Repo rate is the rate at which the country’s central bank lends money to the commercial banks generally against government securities. Reverse Repo rate is the rate at which country’s central bank borrows money from the commercial banks.

Objectives of Repo

Repo and reverse repo rates form a part of the liquidity adjustment facility of the Central Bank. Reduction in Repo rate helps the commercial banks to get money at a cheaper rate and increase in Repo rate discourages the commercial banks to get money as the rate increases and becomes expensive.

The increase in the Repo rate will increase the cost of borrowing and lending of the banks which will discourage the public to borrow money and will encourage them to deposit. This ultimately reduces the money supply in the economy. As the rates are high the availability of credit and demand decreases resulting to decrease in inflation.

On the contrary the Central Bank decreased Repo and Reverse Repo rates to increase the money supply in the economy.


Repo Rate in India

The Reserve Bank of India Act, 1934, defines

  1. "repo" means an instrument for borrowing funds by selling securities of the Central Government or a State Government or of such securities of a local authority as may be specified in this behalf by the Central Government or foreign securities, with an agreement to repurchase the said securities on a mutually agreed future date at an agreed price which includes interest for the funds borrowed;
  2. "reverse repo" means an instrument for lending funds by purchasing securities of the Central Government or a State Government or of such securities of a local authority as may be specified in this behalf by the Central Government or foreign securities, with an agreement to resell the said securities on a mutually agreed future date at an agreed price which includes interest for the funds lent;

Term Repo under Liquidity Adjustment Facility

In October 2013, RBI introduced Term Repo under the Liquidity Adjustment Facility (LAF) for 14 days and 7 days tenors for banks (scheduled commercial banks other than RRBs) in addition to the existing daily LAF (repo and reverse repo) and MSF. Term repo auctions are conducted on CBS (E-KUBER) platform through electronic bidding.

While the 14 day term repo of tenor is conducted every reporting Friday, the 7 day term repo is conducted on every non-reporting Friday. In case the notified amount for the 14-day term repo is not fully subscribed, a 7-day term repo is conducted on the following Friday for the remaining un-subscribed amount. In case of full subscription in the 14-day term repo, the 7 day term repo auction on the following Friday does not take place.

RBI announces the amount to be auctioned under term repo along with its tenor one day prior to the auction. The minimum bid amount for the auction is Rupees one crore and multiples thereof. Term repo auctions are conducted on Fridays between 11.00 -11.30 AM. In case Friday falls on a holiday, the auction takes place on the preceding working day at Mumbai. The eligible collateral for term repo and the applicable haircuts remains the same as daily LAF repo and MSF.

Straight Through Processing (STP)

Reserve Bank of India introduced Straight Through Processing (STP) in fixed rate LAF Repo, fixed rate LAF Reverse Repo with effect from August 3, 2015. This enables the eligible participants to receive the credit or debit immediately on placement of the bids or offers, subject to the availability of the collateral or funds, within the prescribed time window.

Eligible participants can place multiple bids/offers in the respective liquidity facilities. Settlement of the transaction are automatic and immediate after the placement of the bid/offer. The transactions undertaken by a participant will be final and request for cancellation of bids or offers are not entertained.


  • The Federal Reserve has a responsibility to ensure the safety and soundness of financial institutions and to contain systemic risks in financial markets.

  • ~ Bernie Sanders


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Repo Rate
Historical Rate

Select Date

Repo Rate

%

Reverse Repo Rate

%

DATE RATE   CHANGE
Aug 01, 2018 6.50% 0.25%
Jun 06, 2018 6.25% 0.25%
Aug 02, 2017 6.00% 0.25%
Apr 06, 2017 6.25% 0.00%
Oct 04, 2016 6.25% 0.25%
Apr 05, 2016 6.50% 0.25%
Sep 29, 2015 6.75% 0.50%
Jun 02, 2015 7.25% 0.25%
Mar 04, 2015 7.50% 0.25%
Jan 15, 2015 7.75% 0.25%
Jan 28, 2014 8.00% 0.25%
Oct 29, 2013 7.75% 0.25%
Sep 20, 2013 7.50% 0.25%
May 03, 2013 7.25% 0.25%
Mar 19, 2013 7.50% 0.25%
Jan 29, 2013 7.75% 0.25%
Apr 17, 2012 8.00% 0.50%
Oct 25, 2011 8.50% 0.25%
Sep 16, 2011 8.25% 0.25%
Jul 26, 2011 8.00% 0.50%
Jun 16, 2011 7.50% 0.25%
May 03, 2011 7.25% 0.50%
Mar 17, 2011 6.75% 0.25%
Jan 25, 2011 6.50% 0.25%
Nov 02, 2010 6.25% 0.25%
Sep 16, 2010 6.00% 0.25%
Jul 27, 2010 5.75% 0.25%
Jul 02, 2010 5.50% 0.25%
Apr 20, 2010 5.25% 0.25%

Tax on Petrol

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You pay Rs. 35.70 as Tax when you buy one litre of Petrol i.e. Tax on Petrol is 87.9%.

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