What is Repo rate? Write down the effect of changing Repo rate?

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Repo rate is the rate at which the central bank of a country (Reserve Bank of India in case of India) lends money to commercial banks in the event of any shortfall of funds. It is used for controlling inflation of a country.
High Repo rate:
Taking loan from RBI will be costlier.
Effect of High rates will lead to decrease in money supply. Subscribe on YouTube

/> High rate of EMI’s and Loan for retail consumer.
High cost of loan for loanee.
Reduction in inflation rate.

Low repo rate:
More money supply in the market
Inflationary tendencies.
Low EMI’s and low cost of loan for retail consumer.
Also utilise

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as a tool to give a impetus to the economy in the short down when investment is at passive state.

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