Banking & savings
Repo rate
The rate at which the RBI lends to banks, which drives your loan and deposit rates.
The repo rate is what the RBI charges banks to borrow money. It is the anchor for interest rates across the economy.
When the RBI raises the repo rate, loan EMIs and FD rates tend to rise; when it cuts, they tend to fall.
Watching repo rate moves helps you time big decisions, like locking an FD or choosing a floating home loan.
For example
When the RBI hikes the repo rate, your floating-rate home loan EMI usually goes up within a few months.