My new piece in BQ.
The recent RBI decision to tweak Reverse Repo rates has created a lot of interest and confusion in markets. I track the long history of evolution of repo and reverse repo rates in India. This history is fascinating and complex as there have been so many changes in the two interest rates. What is fascinating is rpo was earlier used for absorption of liquidity and reverse repo for infusing liquidity. The nomenclature was changed in 2004 in line with global standards.
Much more in the piece.