RBI Repo Rate Update: RBI’s monetary policy decisions announced today, know what is the estimated repo rate?

Business Desk – RBI Repo Rate Update: The decisions of the three-day long Monetary Policy Committee meeting of the Reserve Bank of India (RBI) will be announced today. The market expects that the Central Bank will keep the repo rate at 5.25%. However, some experts also believe that interest rates may increase as pressure on the rupee is increasing. There is also a risk of inflation.

There was no change in the repo rate even in April. RBI last changed the rate in December 2025. It was reduced by 0.25% to 5.25%. Repo rate is the rate at which RBI lends money to banks. When RBI reduces the repo rate, banks often pass this benefit on to their customers.

RBI meetings are held every two months

There are six members in the Monetary Policy Committee. Three members are from RBI, while the remaining members are appointed by the Central Government. RBI holds meetings every two months. A total of six meetings of the Monetary Policy Committee have been scheduled for the financial year 2026-27. The first meeting was held between April 6 and 8, 2026.

What is repo rate and how does it make loans cheaper?

Repo rate is the interest rate at which RBI lends money to banks. Lower repo rates mean that banks can borrow funds at lower interest costs. When banks get cheap loans, they often pass this benefit on to customers by reducing their interest rates.

Why does the Reserve Bank increase or decrease the repo rate?

Any central bank has a powerful tool to deal with inflation – the policy rate. When inflation is high, the Central Bank tries to stop the flow of money in the economy by increasing the policy rate.

Due to high policy rate, it becomes expensive for commercial banks to borrow from the Central Bank. As a result, banks increase the interest rates on loans for their customers. This reduces the flow of money in the economy; Due to reduced supply of money, demand reduces, which also reduces inflation.

Conversely, when the economy is going through a recession, it becomes necessary to increase the money supply to promote recovery. In such a situation, the Central Bank reduces the policy rate. This makes it cheaper for banks to borrow from the Central Bank and customers also get loans at lower rates.