Repo rate is applicable to ____ lending, while bank rate is applicable to ____ lending
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Repo rate is applicable to ____ lending, while bank rate is applicable to ____ lending.
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Repo rate is applicable to Short-term lending, while bank rate is applicable to long-term lending.
Explanation:-
Repo Rate:-
The repo rate is the rate at which the central bank of a country lends money to commercial banks to meet their short-term needs.
It is also called repurchase rate as the central bank advances loans against approved securities or eligible bills of exchange at a predetermined price repurchased by the commercial banks.
Bank Rate:-
The bank rate is the rate at which the central bank of a country lends money to commercial banks to meet their long-term needs.
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