Answer:
Repo Rate is the rate at which the Reserve Bank of India (RBI) lends money to commercial banks.
Detailed Explanation:
When banks face a shortage of funds, they borrow money from RBI. The interest charged on this borrowing is called the Repo Rate.
- Increase in Repo Rate → Loans become expensive.
- Decrease in Repo Rate → Loans become cheaper.
Repo Rate is one of the most important tools used by RBI to control inflation and regulate liquidity in the economy.
