What are the meanings for the following terms: 1.) Repo rate, 2.) Reverse Repo rate, 3.) Consumer Price Index,

Answer 1

l. A repo rate is the interest rate you lock in when you borrow money by selling a bond while agreeing to repurchase the same bond at a later date at a specified price.

2.The opposite is called a reverse repo. The repo rate should be slightly below the interest rate implied from interest rate futures because it is collateralized.

3.Monthly reports on changes in the prices paid by urban consumers for a representative basket of goods and services.

This is devise the government uses to determine where the ecomony stands in relation to the items chosen to be reported.