Repo Rate
On October 7, 2026, the RBI raised the repo rate to 5.50%, its first increase since February 2023. The repo rate is the interest the RBI charges when it lends money to commercial banks overnight. Push it up and banks pay more for their own funding, so they charge more on every loan. Pull it down and borrowing gets cheaper everywhere at once.
Every home loan, business loan and fixed deposit in the country is priced off this one number.
Raise the repo rate and borrowing gets more expensive, which slows spending and cools inflation. Cut it and borrowing gets cheaper, which is why growth-focused years usually come with rate cuts. The RBI’s Monetary Policy Committee meets six times a year to decide, and its announcement is one of the most closely watched events on the Indian financial calendar.
Through 2025 the RBI cut the repo rate four times, from 6.50% to 5.25%, as inflation fell to record lows. In October 2026, with war-driven oil prices and a weak monsoon pushing inflation above 5% and the rupee near record lows, it reversed course. On a ₹50 lakh, 20-year floating-rate loan, a 0.25% hike adds roughly ₹800 to the monthly EMI, applied automatically at the next reset.