What is repo and reverse repo auction?

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  #1  
Old 11th June 2006, 11:04 AM
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Sharenewbee is on a distinguished road
Default What is repo and reverse repo auction?



Dear members,


What is repo and reverse repo auction? Recently, RBI has increased the rate by 25 bps(I heard it from the media). Some of the people in the broker office said it is negative for the market. Can anyone help me about how it affects the market?

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  #2  
Old 11th June 2006, 11:23 AM
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Czar is on a distinguished road
Default Re: What is repo and reverse repo auction?

would request to use the I require help thread to popst all questions instead of making new threads for each...

About your question maybe someone can help, I just have a faint knowledge of the same, not qualified to answer you


Last edited by Czar : 11th June 2006 at 02:23 PM.
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  #3  
Old 11th June 2006, 10:56 PM
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Default Re: What is repo and reverse repo auction?

Quote:
Originally Posted by Sharenewbee
Dear members,


What is repo and reverse repo auction? Recently, RBI has increased the rate by 25 bps(I heard it from the media). Some of the people in the broker office said it is negative for the market. Can anyone help me about how it affects the market?

Here... see attachment which I compiled thanks to Google. The challenge was in finding writeups which were comprehensive as well as basic. (Also gave me a chance to brush up my rusty banking concepts)

As to your question abt the latest move being negative for the market, it probably is to some extent since some liquidity will be sucked out from the system, raising interest costs. Select Banks could however benefit as lending rates (and interest spreads) will tend to rise marginally.

Welcome others' views

AGILENT

Attached Files
File Type: doc Repo Reverse repo fundas.doc (22.5 KB, 25 views)
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  #4  
Old 12th June 2006, 04:11 PM
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Default Re: What is repo and reverse repo auction?

Rising interest rates have an effect in strengthening the currency as well and reducing inflation.
Thus it works both ways.

regards
m

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