Current Repo Rate 2025
What is REPO Rate?
The Repo Rate (stands for ‘Repurchase Agreement or Repurchasing Option’) is the interest rate at which the RBI (Reserve Bank of India) lends money to commercial banks in exchange for securities. It helps regulate liquidity and control inflation, and the current repo rate stands at 5.50% as of August 2025.
An agreement between the central bank and the commercial bank will be made to repurchase the securities at a price that is predetermined. This is done when banks face a shortage of funds or need to maintain liquidity in volatile market conditions. The RBI uses the repo rate to control inflation rates.
On 6 June 2025, the Reserve Bank of India (RBI) reduced the repo rate of 6.00% by 50 basis points, bringing the repo rate down to 5.50%.
The reverse repo rate stands unchanged at 3.35%.The Bank Rate and the Marginal Standing Facility (MSF) rate has changed to 5.75%.The Standing Deposit Facility Rate is 5.25%.
RBI Repo Rate
Repo Rate | 5.50% |
Bank Rate | 5.75% |
Reverse Repo Rate | 3.35% |
Marginal Standing Facility Rate | 5.75% |
Note that the rates are applicable from6 June 2025.
Find REPO Linked: Home Loan Interest Rate
RBI Repo Rate Cut History from 2005 till 2025
The change in repo rate in India since October 2005 can be summed up as follows:
Effective Date | Repo Rate | %Change |
6 June 2025 | 5.50% | 0.50% |
9 April 2025 | 6.00% | 0.25% |
7 February 2025 | 6.25% | 0.25% |
6 December 2024 | 6.50% | |
18 September 2024 | 6.50% | - |
8 June 2023 | 6.50% | - |
8 February 2023 | 6.50% | 0.25% |
7 December 2022 | 6.25% | 0.35% |
30 September 2022 | 5.90% | 0.5% |
5 August 2022 | 5.40% | 0.5% |
8 June 2022 | 4.90% | 0.5% |
May 2022 | 4.40% | 0.4% |
09 Oct 2020 | 4.00% | 0.00% |
06 Aug 2020 | 4.00% | 0.00% |
22 May 2020 | 4.00% | 0.40% |
27 March 2020 | 4.40% | 0.75% |
6 February 2020 | 5.15% | 0.25% |
07 August 2019 | 5.40% | 0.35% |
06 June 2019 | 5.75% | 0.25% |
04 April 2019 | 6.00% | 0.25% |
07 February 2019 | 6.25% | 0.25% |
01 August 2018 | 6.50% | 0.25% |
06 June 2018 | 6.25% | 0.25% |
02 August 2017 | 6.00% | 0.25% |
04 October 2016 | 6.25% | 0.25% |
05 April 2016 | 6.50% | 0.25% |
29 September 2015 | 6.75% | 0.50% |
02 June 2015 | 7.25% | 0.25% |
04 March 2015 | 7.50% | 0.25% |
15 January 2015 | 7.75% | 0.25% |
28 January 2014 | 8.00% | -0.25% |
29 October 2013 | 7.75% | -0.25% |
20 September 2013 | 7.50% | -0.25% |
03 May 2013 | 7.25% | -0.50% |
17 March 2011 | 6.75% | -0.25% |
25 January 2011 | 6.50% | -0.25% |
02 November 2010 | 6.25% | -0.25% |
16 September 2010 | 6.00% | -0.25% |
27 July 2010 | 5.75% | -0.25% |
02 July 2010 | 5.50% | -0.25% |
20 April 2010 | 5.25% | -0.25% |
19 March 2010 | 5.00% | -0.25% |
21 April 2009 | 4.75% | 0.25% |
05 March 2009 | 5.00% | 0.50% |
05 January 2009 | 5.50% | 1.00% |
08 December 2008 | 6.50% | 1.00% |
03 November 2008 | 7.50% | 0.50% |
20 October 2008 | 8.00% | 1.00% |
30 July 2008 | 9.00% | -0.50% |
25 June 2008 | 8.50% | -0.50% |
12 June 2008 | 8.00% | -0.25% |
30 March 2007 | 7.75% | -0.25% |
31 January 2007 | 7.50% | -0.25% |
30 October 2006 | 7.25% | -0.25% |
25 July 2006 | 7.00% | -0.50% |
24 January 2006 | 6.50% | -0.25% |
26 October 2005 | 6.25% | 00.00 |
How Does Repo Rate Work?
As mentioned earlier, the repo rate is used by the central bank of India to control the flow of money in the market. When the market is hit by inflation, RBI increases the repo rate.
An increased repo rate denotes that the banks who borrow money during this period from the central bank will have to pay higher interest. This discourages the banks from borrowing money, which in turn, reduces the supply of money in the market and helps negate inflation. Similarly, the repo rates are decreased in the case of a recession.
How Does RBI Calculate Repo Rate?
On the basis of the economic condition, as discussed in the last paragraph, the RBI regulates the repo rate. The rates are decided by the central bank on the basis of inflation or recession in the market of the country.
Repo Rate vs Reverse Repo Rate
Repo Rate vs Reverse Repo Rate is one of the most important topics that we need to understand. The difference can be listed as follows:
- Repo rate is charged against funds lent by the RBI to commercial banks and other financial institutions. The reverse repo rate, on the other hand, is the rate of interest that is offered by the central bank to the commercial banks who deposit funds in the RBI treasury.
- Repo rate is always higher than the reverse repo rate.
- Repo rate helps to control the inflation in the market. The reverse repo rate, on the other hand, helps to control the supply of money in the market.
What is the Difference between the Repo rate and the MCLR rate?
Marginal Cost of funds based Lending Rate or MCLR is a reference rate which is used internally for ascertaining the interest rate which can be levied by the banks on loans. The repo rate, on the other hand, is an interest rate which is determined by the Reserve Bank of India (RBI) and charged against the funds lent by the central bank to commercial banks and all other financial institutions.
What effect does the repo rate have on the life of a common man?
The effect of repo rate on the life of common man is direct in terms of the increase in the overall interest. As discussed earlier, repo rate is the rate of interest which is charged by the RBI for funds lent to the commercial banks.
When the repo rate increases, the interest rate at which commercial banks borrow money from the central bank increases and the borrowing becomes costlier. In turn, the commercial banks increase their lending rates to cope with the hike in the repo rate. Thus, when common men borrow money from the commercial banks, the effective interest rate becomes higher and they end up paying higher interest amounts for the loan that they borrow.
What is the relationship between Inflation and Repo Rate?
The repo rate is used by the central bank of India to control the supply of money in the Indian market. A higher repo rate helps in reducing the borrowing power of the commercial banks which, in turn, reduces the flow of cash in the market. This method helps to control inflation.
Let us take an example here. Let us assume that the country has been hit by inflation and the RBI has set the repo rate at 10%. In this case, if a commercial bank is borrowing an amount of Rs.10,000 from the central bank, the interest amount for the same will be Rs.1,000.
To avoid paying this higher rate of interest, the commercial banks decide to borrow further from the RBI, which reduces the supply of cash in the market. As the flow of cash reduces in the market, the demand is not met. This helps in checking inflation and regulating it accordingly.
FAQs on Current Repo Rate
- What is the repo rate?
Repurchase Agreement or Repurchasing Option is referred to as "repo." The Reserve Bank of India (RBI) uses the repo rate as an interest rate,when lending money to commercial banks to control inflation rates.
- What is reverse repo rate?
The interest rate that the central bank offers to commercial banks that deposit money in the RBI treasury is known as the reverse repo rate.
- What is the difference between repo rate and reverse repo rate?
The RBI charges a repo rate on the money it lends to commercial banks and other financial institutions while the interest rate that the central bank offers to commercial banks that deposit money in the RBI is the reverse repo rate.Reverse repo rate is never greater than repo rate.Repo rates assist in reducing market inflation.On the other hand,the reverse repo rate aids in regulating the amount of money available in the market.
- What is the Marginal Cost of Funds Based Lending Rate?
The Marginal Cost of Funds Based Lending Rate, also known as MCLR,is a benchmark rate that banks use internally to determine the maximum interest rate they can charge borrowers.
- What types of loans are impacted by the reduction or increase in repo rates?
A reduction or increase in the repo rate will affect loans like personal,vehicle,home,and gold loans.
- How frequently will banks alter loan interest rates that are tied to the repo rate?
Guidelines established by the Reserve Bank of India state that interest rates based on an external benchmark interest rate must be revised every 3 months.
News about Repo Rate
Reserve Bank of India decreases repo rate by 50 basis points today on 6 June
The Reserve Bank of India (RBI) reduced the repo rate by 50 basis points to 5.50% today, 6 June 2025, marking the third consecutive rate cut this year. The RBI has also changed its policy stance to 'Neutral' and lowered the cash reserve ratio (CRR) by 100 basis points to 3%, encouraging banks to enhance lending. These measures are designed to maintain growth momentum while keeping inflation in check.
Reserve Bank of India reduces repo rate by 25 bps
The Reserve Bank of India (RBI) Monetary Policy Committee (MPC), comprising six members, reduced the repo rate by 25 basis points to 6.25% on Friday. This marks the first rate cut in five years, with the last reduction occurring in May 2020.
Previously set at 6.5%, the repo rate determines the cost at which RBI lends to banks. The decision follows the government’s recent move to cut personal income tax to boost consumer spending. The MPC unanimously voted for the rate cut, aiming to stimulate economic activity by making borrowing more affordable, thereby encouraging spending and investment. However, the committee opted to maintain a “neutral” stance, which RBI Governor Sanjay Malhotra explained would allow flexibility to adapt to changing economic conditions.
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