Economy GS 3 In the news 6 times

Repo Rate

Mechanism and Transmission

The repo rate (repurchase agreement rate) is the rate at which the RBI lends short-term funds to commercial banks against government securities as collateral. It is the primary policy instrument through which the RBI controls the cost of money in the economy.

Key details

Current repo rate (April 2026): 5.25% (unchanged)
Standing Deposit Facility (SDF) rate: typically repo rate minus 25 bps = 5.00%
Marginal Standing Facility (MSF) rate: typically repo rate plus 25 bps = 5.50%
Reverse repo rate (discontinued as primary signalling tool; replaced by SDF in April 2022)
Rate transmission: Change in repo rate → change in bank lending rates (MCLR/EBLR) → change in borrowing costs for households and firms → impact on inflation and growth. Full transmission typically takes 2–4 quarters.
The RBI switched from the Monetary Policy Framework Agreement (MPFA) of 2015 to the statutory MPC framework in 2016 following Urjit Patel Committee recommendations.

In the news

● Tracked since March 27, 2026 · last seen June 21, 2026 · updates as the daily brief publishes

21 Jun '26

RBI expected to hold repo at 5.25% as uncertainty eases, will watch food and fuel pass-through: BofA Securities

Economics

22 Apr '26

West Asia crisis, inflation weighed on RBI panel’s decision on interest rate: MPC minutes

Economics

08 Apr '26

RBI holds repo rate, sees GDP growth slowing to 6.9% in FY27

Economics

08 Apr '26