Differentiate the following in brief: (i) Repo Rate and Reverse Repo Rate.

Repo Rate Reverse Repo Rate Repo Rate also known as the benchmark interest rate is the rate at which the RBI lends money to the banks for a short term. RBI purchase Government securities from Bank, payment are made to banks, inject liquidity in the market. Reverse Repo Rate is the short term borrowing rate at which RBI borrows money from banks. RBI sells Government Securities in the market. It provides short term avenues to banks to park their surplus funds. Absorbs liquidity from the market