THIS PROJECT IS HELPFUL FOR CA/CS/CWA/BANKING STUDENTS.

1. P R E S E N T E D B Y H E M A N T T O L A N I & P U S H P R A J C H O R M A G E
I T T - 2 0 1 9 B A T C H 1 1 - A H M E D N A G A R
PROJECT ON REPO RATE

2. END
CONTENTS
MEANING OF REPO RATE
HOW DOES REPO RATE WORK?
WHAT ARE THE COMPONENTS OF A REPO TRANSACTION?
HOW DOES REPO RATE AFFECT THE ECONOMY?
A. WHEN INFLATION RISES?

3. END
……CONTINUE
B. WHEN RBI WANTS TO FLOW CASH INTO THE SYSTEM?
WHAT IS MEANT BY REVERSE REPO RATE?
REPO RATE AND REVERSE REPO RATE
CURRENT REPO RATE AND REVERSE RAPO RATE
CHANGES IN REPO RATE BY RBI

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MEANING OF REPO RATE
 Repo rate refers to the rate at which commercial
banks borrow money from the Reserve Bank of India
(RBI) in case of shortage of funds.
 It is one of the main tools of RBI to keep inflation
under control.

5. END
HOW DOES REPO RATE WORK?
Borrow money from RBI
On which they must pay interest
This interest rate is repo rate
Technically, Repo stands for ‘Repurchasing Option’.
banks provide eligible securities (Treasury Bills)

6. END
WHAT ARE THE COMPONENTS OF A REPO
TRANSACTION?
• Provide Securities
• RBI Provides loan
• Charge Interest
• Repayment and
Recollect
Components

7. END
HOW DOES REPO RATE AFFECT THE
ECONOMY?
powerful arm of
the Indian
monetary
policy
direct
relationship
with the cost of
borrowing for
banks.

8. END
A. WHEN INFLATION RISES
Reduce the money supply
Increase the repo rate
Slows down investment and money
supply
It negatively impacts the growth of
the economy

9. END
B. WHEN RBI WANTS TO FLOW CASH INTO
THE SYSTEM
RBI needs to pump
funds into the system
cheaper borrowing for
industries
Increases supply of
money
Increase in growth
rate

10. END
CHANGES IN REPO RATES BY RBI
Last
Update Rate
06th Jun
19
5.75%
04th Apr
19
6.00%
07th Feb
19
6.25%
05th Dec
18
6.50%
05th Oct
18
6.50%
01st Aug
18
6.50%
06th Jun
18
6.25%
05th Apr
18
6.00%
5.20%
5.40%
5.60%
5.80%
6.00%
6.20%
6.40%
6.60%
06th
Jun 19
04th
Apr 19
07th
Feb
19
05th
Dec
18
05th
Oct 18
01st
Aug
18
06th
Jun 18
05th
Apr 18
RATE
DATE
REPO RATES BY RBI
Rate

11. END
Impact of Recent RBI Repo Rate Hike on
Financial Sector
Effects on Inflation
Effects on fixed deposits
Effects on borrowing
Effects on home loan
Effects on economy

12. END
WHAT IS MEANT BY REVERSE REPO RATE?
 Reverse repo is the exact opposite of repo.
reverse
repo transaction
banks purchase
government
securities form RBI
lend money
for earning
interest

13. Repo Rate Reverse Repo Rate
It is the rate at which RBI
lends money to banks
It is the rate at which RBI
borrows money from banks
It is higher than reverse
repo rate
It is lower than repo rate
It is used to control
inflation
It is used to control money
supply
It involves sale of
securities which would
be repurchased in future.
It involves transfer of money
from one account to another.

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CURRENT REPO RATE AND REVERSE REPO
RATE
The current
Repo Rate as
fixed by the RBI is
5.75%.
The reverse repo
rate has also
decreased from
5.75% to 5.50%
and the Marginal
Standing Facility
Rate (MSF) and
the
Bank Rate have
decreased from
6.25% to 6.00%.

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RECENT CHANGES IN RATES BY RBI
Date Repo Rate
Reverse Repo
Rate
CRR SLR
June 2019 5.75% 5.50% 4% 19.50%
Apr-19 6% 5.75% 4% 19.50%
Feb-19 6.25% 6% 4% 19.50%
Dec 2018 6.50% 6.25% 4% 19.50%
Oct 2018 6.50% 6.25% 4% 19.50%
Aug 2018 6.50% 6.25% 4% 19.50%
Jun 2018 6.25% 6% 4% 19.50%
Apr 2018 6% 5.75% 4% 19.50%

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0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
16.00%
18.00%
20.00%
June
2019
Apr-19 Feb-19 Dec
2018
Oct
2018
Aug
2018
Jun
2018
Apr
2018
RECENT CHANGES IN RATES BY RBI
Repo Rate
Reverse Repo Rate
CRR
SLR

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CONCLUSION
After studying this project we are able to
understood that -
• How Repo Rate works?
• How Reverse Repo Rate works?
• How Inflation & Deflation controlled by
Repo Rate?
• Difference between Repo Rate & Reverse
Repo Rate.
• Changes in rates by RBI.

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GUIDENCE BY
PALAK BORA MAM
CA NEHA BORA MAM
CA PALLAVI CHORDIYA MAM
CA GHANSHYAM SOLANKI SIR

19. THANKING YOU