Reporäntor

Reporäntor, or the repo rate, is a key policy rate set by a central bank, most notably the European Central Bank (ECB) for the euro area and Sweden's Riksbank. It represents the interest rate at which commercial banks can borrow money from the central bank for a short period, typically overnight, against collateral. This borrowing is done through repurchase agreements, or "repos," hence the name.

The repo rate serves as a crucial tool for influencing the broader economy. By adjusting the repo rate, the central bank aims to control inflation and stimulate or dampen economic activity. A lower repo rate makes it cheaper for banks to borrow, which can lead to lower interest rates on loans for businesses and consumers, encouraging spending and investment. Conversely, a higher repo rate makes borrowing more expensive, potentially slowing down inflation and economic growth.

Central banks use the repo rate as a primary mechanism for implementing monetary policy. Changes in the repo rate ripple through the financial system, affecting other interest rates like mortgage rates, savings account yields, and interbank lending rates. This interconnectedness allows the central bank to steer the overall cost of money and credit in the economy, ultimately influencing inflation and employment levels. The repo rate is closely watched by financial markets and businesses as an indicator of the central bank's stance on economic conditions.