|
Discount rate at which central banks repurchase government securities from commercial banks, affecting the level of money supply in the country's monetary system. To temporarily expand the money supply, the central bank decreases repo rates (so that banks can swap their holdings of government securities for cash), to temporarily contract the money supply it increases the repo rates. The central bank can also decide on a desired level of money supply and let the markets determine the appropriate repo rate.
|
|
