Imagine that the central bank is concerned about the rate of growth of credit in the economy.

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Imagine that the central bank is concerned about the rate of growth of credit in the economy. Explain how it might use its position in the repo market to tackle this problem. Work an example to illustrate how it might use gilt repos to raise interest rates from 5 per cent to 5.5 per cent.

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JAPHETH KOGEI

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