RBI Repo Rate Hike: What crores of people of the country were afraid of has finally happened. Reserve Bank of India i.e. RBI has increased the repo rate by 0.25%. With this, the repo rate has increased from 5.25% to 5.50%. The effect of increase in repo rate will be visible on the EMI of your bank loan. Car and home loan EMI has become expensive. RBI has increased the interest rate after 44 months. This decision has been taken by RBI in view of the continuously increasing inflationary pressure.
RBI MPC has increased the repo rate after 44 months. The repo rate was last increased by the RBI MPC in February 2023. In the year 2025, the RBI repo rate was reduced by 125 basis points. There was no increase in it since the last 4 meetings.
Giving information about the decision to increase the repo rate, Reserve Bank of India Governor Sanjay Malhotra announced that the kind of global economic conditions are being seen at present. In view of this, the policy repo rate has been increased by 25 basis points. After this the repo rate has increased to 5.5 percent. He also said that there is a danger of increasing global inflation and an atmosphere of uncertainty in the stock market.
STF rate adjusted to 5.25 percent
According to RBI Governor Sanjay Malhotra, MPC has announced increase in interest rates. This increase of 25 basis points has been seen. After which RBI’s repo rate will increase from 5.25 percent to 5.50 percent. The STF rate has been adjusted to 5.25 per cent, and the Marginal Standing Facility (MSF) rate and bank rate have been adjusted to 5.75 per cent. RBI Governor Sanjay Malhotra said the MPC observed that the global environment remains challenging due to geopolitical developments. Despite this, the Indian economy has remained strong and economic momentum has persisted.
Inflation estimate increased
Along with increasing the repo rate, the Reserve Bank has also increased the core inflation rate estimate for FY27. It has been increased to 4.4 percent from the earlier 4.3 percent. Along with this, the estimate of Consumer Price Index based inflation i.e. CPI has been increased from 5 percent to 5.2 percent.
Know how much EMI will increase
With this increase of 0.25% (25 basis points) by RBI in the repo rate, the interest rates on your bank loan will also increase by 0.25%. For example, on a home loan of Rs 50 lakh, your monthly EMI will increase by approximately Rs 780 to Rs 817. Considering the current interest rate as 7.50%, then after the repo rate increases by 0.25%, it will increase by the same amount to 7.75%. In such a situation, as per the current repo rate on home loan up to Rs 50 lakh taken for 20 years, the EMI will increase by Rs 777. Where earlier the monthly installment was Rs 40,280 at 7.50% interest rate. At the same time, now it will increase to Rs 41,057. Similarly, if you have taken a loan of Rs 50 lakh for 25 years, then the monthly installment at 7.50% interest rate will be Rs 37,766, which earlier used to be Rs 36,950 at 7.50% interest rate.