Full formBanking & Finance
RRPstands forReverse Repo Rate
Full Form of RRP
What is RRP?
The Reverse Repo Rate (RRP) is the rate at which the Reserve Bank of India borrows money from commercial banks for short-term periods. It is a vital instrument of monetary policy used by the RBI to manage liquidity in the banking system and control inflation. When the central bank wants to absorb surplus funds from the economy, it raises the reverse repo rate, encouraging banks to park their excess cash with the RBI instead of lending it out. On the other hand, lowering the rate pushes banks to release more money into circulation for loans and investments. In India, the reverse repo rate is decided by the Monetary Policy Committee and reviewed during the bi-monthly policy meetings. It is generally set 25 basis points below the repo rate. For aspirants preparing for banking examinations such as IBPS, SBI PO, and RBI Grade B, as well as UPSC and SSC, understanding the reverse repo rate along with other key policy tools is highly important.
RRP का फुल फॉर्म
रिवर्स रेपो रेट
Example
The Reserve Bank of India recently raised the Reverse Repo Rate to absorb excess liquidity and control rising inflation across the economy.
RRP — frequently asked questions
What is the full form of RRP in banking?
RRP stands for Reverse Repo Rate, which is the rate at which the Reserve Bank of India borrows money from commercial banks for short-term periods.
What is the current Reverse Repo Rate in India?
The reverse repo rate is revised by the RBI during its Monetary Policy Committee meetings, and the latest rate is always published on the official RBI website.
How is Reverse Repo Rate different from Repo Rate?
The repo rate is the rate at which the RBI lends money to commercial banks, while the reverse repo rate is the rate at which the RBI borrows money from commercial banks.