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Simple meaningThe rate at which RBI lends short-term funds to banks.
Relevant ActRBI Act, 1934
Technical meaning
The policy rate under the Liquidity Adjustment Facility at which the RBI provides liquidity to banks against eligible securities.
Practical example
A repo rate cut usually lowers loan interest rates over time.
Related terms
- CRR
- SLR
Official reference
RBI Act, 1934
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