The RBI Reverse Repo Rate Decision concerns the interest rate on reverse borrowing, at which the RBI borrows money from commercial banks. The RBI may use this tool when too much money accumulates in the banking system.
A change in repo rate affects the inflow of liquidity into the banking system, while the reverse repo affects the outflow of liquidity to the Reserve Bank. An unexpected decrease in the reverse repo rate can be seen as positive for INR quotes.
