REPO RATE

February 10, 2025

The Reserve Bank of India’s (RBI) six-member Monetary Policy Committee (MPC) cut the repo rate by 25 basis points to 6.25 per cent on February 7,2025.
This is the first rate cut initiated by the RBI in five years, the last one being in May 2020.
Repo rate is the rate at which the central bank of a country(RBI in case of India) lends money to commercial banks in the event of any shortfall of funds. Here, the central bank purchases the security.
As such, the repo rate forms the floor interest rate for all other interest rates in the economy.
Repo rate is used by monetary authorities to control inflation.