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Repo Rate
The rate at which the Reserve Bank of India lends money to commercial banks. When the repo rate changes, lending rates across the economy typically follow.
The repo rate is the RBI's primary monetary policy tool. When the RBI wants to reduce inflation, it raises the repo rate — making borrowing more expensive. When it wants to stimulate growth, it cuts the repo rate.
For borrowers, the repo rate matters because external benchmark-linked loans (EBLR) are directly tied to it. A 0.25% repo rate cut means a 0.25% reduction in your floating rate home loan or LAP within 1–3 billing cycles.
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