The repo rate today stands at 6.50%.
The Reserve Bank of India (RBI) last updated this rate on February 8, 2024, choosing to keep it unchanged. This rate is a key policy instrument used by the RBI to manage liquidity and inflation in the economy.
Understanding the Current Repo Rate
The current repo rate is the rate at which commercial banks borrow money from the central bank (RBI) against government securities. It plays a crucial role in influencing the cost of borrowing for banks, and subsequently, for consumers and businesses.
Here's a snapshot of the recent repo rate movements and related figures:
| Rate Type | Current Rate | Date of Last Update (Unchanged) | Date of Last Rate Change | Previous Rate (Before Change) |
|---|---|---|---|---|
| Repo Rate | 6.50% | February 8, 2024 | February 8, 2023 | 6.25% |
| Reverse Repo Rate | 3.35% | - | - | - |
- Repo Rate: The benchmark interest rate at which the RBI lends money to commercial banks. A higher repo rate makes borrowing more expensive for banks, which can lead to higher lending rates for consumers and businesses, helping to curb inflation.
- Reverse Repo Rate: The rate at which the RBI borrows money from commercial banks. It is typically lower than the repo rate and helps absorb excess liquidity from the banking system.
Historical Context and Significance
The repo rate was last changed from 6.25% to 6.50% on February 8, 2023. Since then, the RBI has maintained the rate at 6.50% through several monetary policy reviews, including the most recent update in February 2024. This stability in the repo rate signals the central bank's stance on managing inflation while supporting economic growth.
The decision to keep the repo rate unchanged reflects the RBI's assessment of current economic conditions, including inflation trends, global economic outlook, and domestic growth prospects. Financial institutions and market participants closely monitor these announcements, as they directly impact:
- Lending rates: Affecting home loans, car loans, and business loans.
- Deposit rates: Influencing returns on fixed deposits and savings accounts.
- Overall liquidity: Guiding the availability of funds in the banking system.
For more detailed information and updates on the repo rate, you can refer to financial resources like Bajaj Finserv.
