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Answer Posted / uma.p
WHENEVER THE BANKS HAVE SHORTAGE OF FUNDS THEY CAN BORROW
FROM RBI. REPO RATE IS THE RATE AT WHICH OUR BANKS BORROW
RUPEES FROM RBI. A REDUCTION REPO RATE WILL HELP THE BANKS
TO GET THE MONEY AT CHEAPER RATE AND THE INREASE RATE
BECOMES TO BANKS MORE EXPENSIVE.
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