The United States Overnight Repo Rate increased to 0.03 on Friday April 30 from 0.01 in the previous day. Also known as Discount Rate, Bank Rate is often confused with Overnight Rate Bank Rate is usually higher than Repo Rate as it is an important tool to control liquidity. Repo Rate is described as a rate at which the Central Bank lends short-term loans to the commercial bank in case of shortages Banks borrow funds from the central bank and lends the money to their customers at a higher interest rate, thus, making profits. Meaning: Bank Rate is described as a rate of discount at which the Central Bank (RBI) extends loans to commercial banks and financial institutions.
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