Stress Repo and Reverse Repo
Repo rates are the050-686 rates of interest a bank has to pay to reserve bank, on the loan it takes from reserve bank.
Reverse repo rates are the rates of interest reserve bank pays to the bank on the deposit kept by a bank in the reserve bank.
In other words reserve bank increases repo and reverse repo rates to encourage deposits and discourage borrowing; by the banks; so that the cash flow to the consumers is reduced.
Increase in repo and reverse repo rates is thus aimed at reducing the buying capacity, reducing the demand and thereby bringing down the prices. The increase in repo rates would is expected to increase in the rates of interests on the loans given by the banks, reduction in cash flow, reduction, reduction in the demand and thus reduction in the prices that is inflation.
Reduced returns on the production; is expected to stimulate the production so as to maintain returns; and catalyze growth! Can rate of inflation come down and rate of growth be increased in this way?
By increasing repo and reverse repo; government is further reducing the little white money available to majority of us (urban and rural lower and middle class) and we are being throttled, suffocated by restricting our buying of essential commodities. The producers of essential commodities suffer because; majority of them are also lower or middle class "consumers of essential commodities, which they do not produce and can not buy. The buyers and producers 050-694of the essential commodities such as agricultural products, bicycles, clothes etc. Suffer in this way and the rate of production and hence the growth of all transactions of essential commodities; precipitously comes down.
But the rate of growth as documented in government files is not affected adversely because; the gdp is hardly reflected in the figures of industrial growth; because of the increasing production of the unnecessary and unaffordable (to majority of us) products, increasing unproductive, deceptive, wasteful and sickening marketing gimmicks; and increasing the sale 050-665of these products by owners of black money.
Even as the rural and urban lower and middle class (majority of us) gets crushed in this way; the black money is freely flowing and hence those who have it; buy essential commodities at very high price (even if their production is reduced) and make life difficult for the urban and rural middle class and farmers (majority of us); who can not afford the high prices of essential commodities and inflation of essential commodities also continues.
The suffocation of urban and rural lower and middle class (that is majority of us) by increasing repo and reverse reopo rates and restricting the white cash flow; reduces productive capacity and buying capacity (of majority of us) with respect to essential commodities; while abundant black money of few; continues to cause inflation of every product and morbid growth of luxurious and harmful products.
This is simply a sketch; the details can be filled by any realistic (holistic) and rational economist! But the way out is implementing holistic education, holistic health care and in fact holistic approach in every field, for which the only simple and universal solution is universal practice and promotion of namasmaran.
Reverse repo rates are the rates of interest reserve bank pays to the bank on the deposit kept by a bank in the reserve bank.
In other words reserve bank increases repo and reverse repo rates to encourage deposits and discourage borrowing; by the banks; so that the cash flow to the consumers is reduced.
Increase in repo and reverse repo rates is thus aimed at reducing the buying capacity, reducing the demand and thereby bringing down the prices. The increase in repo rates would is expected to increase in the rates of interests on the loans given by the banks, reduction in cash flow, reduction, reduction in the demand and thus reduction in the prices that is inflation.
Reduced returns on the production; is expected to stimulate the production so as to maintain returns; and catalyze growth! Can rate of inflation come down and rate of growth be increased in this way?
By increasing repo and reverse repo; government is further reducing the little white money available to majority of us (urban and rural lower and middle class) and we are being throttled, suffocated by restricting our buying of essential commodities. The producers of essential commodities suffer because; majority of them are also lower or middle class "consumers of essential commodities, which they do not produce and can not buy. The buyers and producers 050-694of the essential commodities such as agricultural products, bicycles, clothes etc. Suffer in this way and the rate of production and hence the growth of all transactions of essential commodities; precipitously comes down.
But the rate of growth as documented in government files is not affected adversely because; the gdp is hardly reflected in the figures of industrial growth; because of the increasing production of the unnecessary and unaffordable (to majority of us) products, increasing unproductive, deceptive, wasteful and sickening marketing gimmicks; and increasing the sale 050-665of these products by owners of black money.
Even as the rural and urban lower and middle class (majority of us) gets crushed in this way; the black money is freely flowing and hence those who have it; buy essential commodities at very high price (even if their production is reduced) and make life difficult for the urban and rural middle class and farmers (majority of us); who can not afford the high prices of essential commodities and inflation of essential commodities also continues.
The suffocation of urban and rural lower and middle class (that is majority of us) by increasing repo and reverse reopo rates and restricting the white cash flow; reduces productive capacity and buying capacity (of majority of us) with respect to essential commodities; while abundant black money of few; continues to cause inflation of every product and morbid growth of luxurious and harmful products.
This is simply a sketch; the details can be filled by any realistic (holistic) and rational economist! But the way out is implementing holistic education, holistic health care and in fact holistic approach in every field, for which the only simple and universal solution is universal practice and promotion of namasmaran.
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