Sir, it just came to my mind. What will be the effect on the economy when the REPO rate and REVERSE REPO rate becomes equal?
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First of all:
Any reduction (increase) in repo rate will lead to borrowers getting loans at lower (higher) rates, thus encouraging (discouraging) borrowing.
Any reduction (increase) in reverse repo rate will lead to borrowers moving away from (getting encouraged to) parking their funds with RBI.
Following are the possible scenarios: