Repurchase agreement also known as Repo in financial industry is an agreement between the repo seller to take a loan on the collateral security and to buy-back the collateral after a pre-specified duration or at a pre-specified date. In this agreement, the holder of the security (mainly government security, treasury bills, stocks, bonds, loans etc) […]Continue Reading... Comments Off on Repurchase Agreements – Repo
Cash Reserve Requirement (CRR) Cash Reserve Requirement or Cash Reserve Ration (CRR) mandates the banks to hold a certain percentage of the deposit in the form of cash or cash equivalents. Banks can lend the rest of the money to the lenders after maintaining the reserve ratio or requirement. Banks do not normally keep the […]Continue Reading... No Comments.
Bank Rate Bank rate is the rate at which the central bank provides money to the other financial institutions or banks. Bank rate enables the financial institutions (or banks) to borrow money from the central bank to fund any money need. Increase in bank rate leads to higher prime lending rate, the rate at which […]Continue Reading... No Comments.
Monetary Policy is another important part of economics which is used by the Government or the central bank to maintain the liquidity in the market and keep long term interest rate stable. It also provides the favorable monetary platform for economic growth and stability with the aim of stable prices and low unemployment. The central […]Continue Reading... No Comments.