WACR tops repo rate for first time in nearly 2 months
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Key takeaway
WACR rises above the RBI repo rate as liquidity tightens in the banking system.
- Step 1 · The triggerRBI drains liquidity, pushing the weighted average call rate above the repo rate.
- Step 2 · Knock-onBanks' short-term funding costs rise, compressing net interest margins and prompting tighter lending conditions.
- Step 3 · Reaches youIndian SMEs face higher borrowing costs and slower credit disbursement, impacting working capital and operational flexibility.
The trigger is reported by the source below. The steps that follow are Branch²’s traced reasoning — how the shock could reach a business like yours, not a prediction.
Source: IN:Economic Times
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