The Reserve Bank of India (RBI) Governor Mr Shaktikanta Das today announced an increase of 25 basis points in the repo rate. This change will make the basic interest rate to be 6.50per cent . This is the first change in the repo rates since the start of 2023, after the previous change that happened on 7 December 2022 (Then, RBI had increased the repo rates by 35bps). Repo rates are the rates at which RBI lends money to commercial banks and financial institutions.
The interest rates of various loans including homeloans are expected to see an increase with today’s RBI’s decision.
Starting from May 2022, this is the sixth straight increase in repo rates by the central bank. The repo rate changes are decided by the six member Monetary Policy Committee (MPC) of the RBI which meets once in two months. Today’s decision was taken with a 4-2 majority.