Moneycontrol
Dec 07, 2016 10:11 PM IST IST | Source: Moneycontrol.com

Urjit Patel's second review as RBI boss: How interest rates work

RBI Governor Urjit Patel‘s second monetary policy review comes amid the government‘s demonetisation drive which has impacted scores of citizens and businesses. Will an interest rate cut ease some of the pain. Here‘s a look at how interest rates work.


Market analysts and bankers expect a reduction in repo rate when the Reserve Bank of India (RBI) announces its bi-monthly policy on Wednesday.


RBI Governor Urjit Patel’s second monetary policy review comes amid the government’s demonetisation drive which has impacted scores of citizens and businesses.

Generally, a lower repo rate would mean households can expect cheaper bank loans to buy houses and other goods such as cars, provided banks pass on the benefits to consumers. 


Here’s a look at how interest rates work.

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