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Learn the meaning of repo rate , who decides it, and its impact of loans, EMIs, and the Indian economy. The repo rate is one of the most important terms in banking and finance, often making... The repo rate is the interest rate at which the central bank of a country lends credit to banks and financial institutes . The repo rate is an important tool used by the Reserve Bank of India (RBI) to manage the flow of money in the economy. It directly affects how much interest banks charge on loans and offer on deposits. As discussed earlier, repo rate is the rate of interest which is charged by the RBI for funds lent to the commercial banks. When the repo rate increases, the interest rate at which commercial banks borrow money from the central bank increases and the borrowing becomes costlier. Get the latest Repo & Reverse Repo Rate 2025, their meaning, history, impact on the economy, and RBI’s monetary policy updates.