Arthgyaan

Supporting everyone's personal finance journey

What is the latest RBI repo rate? What is the latest RBI reverse repo rate?

This article shows you the current and historical values of the RBI repo and reverse repo rates.

What is the latest RBI repo rate? What is the latest RBI reverse repo rate?


Posted on 15 Jan 2023 • Updated on: 08 Feb 2024
Author: Sayan Sircar
7 mins read
📢Join 2400+ readers on WhatsApp and get new post notifications!

This article shows you the current and historical values of the RBI repo and reverse repo rates.

What is the latest RBI repo rate? What is the latest RBI reverse repo rate?

📚 Topics covered:

What are the current repo and reverse repo rates?

What is the latest repo rate?

The latest repo rate is 6.5%. This rate was last reviewed by RBI on 08 Feb 2024.

What is the latest reverse repo rate?

The latest reverse repo rate is 3.35%. This rate was last reviewed by RBI on 01 Dec 2022.

What is RBI doing with the repo rate recently?

The repo rate is currently going up in India due to inflationary pressure.

RBI, in line with other central banks, has hiked the Repo rate from 4.00% to 6.50% in quick succession:

  • 06-Apr-2023 to 08-Feb-2024: RBI kept the repo rate unchanged at 6.50%.
  • 08-Feb-2023: RBI hiked the repo rate to 6.50% from 6.25%.
  • 07-Dec-2022: RBI hiked the repo rate to 6.25% from 5.90%.
  • 30-Sep-2022: RBI hiked the repo rate to 5.90% from 5.40%.
  • 05-Aug-2022: RBI hiked the repo rate to 5.40% from 4.90%.
  • 08-Jun-2022: RBI hiked the repo rate to 4.90% from 4.40%.
  • 04-May-2022: RBI hiked the repo rate to 4.40% from 4.00%.

The hike is a part of inflation-taming measures put in place by global central banks. For RBI, the Repo rate is now rising towards the pre-COVID-19 pandemic days when the rate was 5.15%. It was lowered twice in March 2020 (to 4.40%) and then again in May 2020 (to 4.00%) to negate the impact of the economic slowdown caused by the pandemic.

As inflation has been rising as the economy recovered, the repo rate rise was inevitable, and further rate increases are unavoidable. The RBI is planning more rate hikes.

Did you know that we have a private Facebook group which you can join for free and ask your own questions? Please click the button below to join.

Rate history in India

The charts below show the history of the RBI repo and reverse repo rates over time:

Chart: Arthgyaan • Source: RBI • Get the data

Chart: Arthgyaan • Source: RBI • Get the data

Understanding the Repo Rate

Repo rate is the rate of interest RBI, the country’s central bank, charges all other banks when borrowing from RBI. The higher the repo rate, the more banks have to pay RBI when borrowing. As a result, the bank charges higher interest rates to people who borrow. The bank offers higher rates for depositors in savings accounts and fixed deposits.

The repo rate, therefore, directly impacts

  • savings account, fixed deposit and recurring deposit rates
  • borrowing rates for personal, gold, car, home and other loans
  • rates of loans that are given to businesses

The basic interest rate equation for a loan is:

Rates for loans = Base rate + Spread

The base rate is derived from the RBI Repo rate. The spread depends on the loan type and the borrower’s credit quality. For example, home loans have a lower spread since they are collateralised. In contrast, personal loans, being without collateral, have a higher spread.

The repo rate, and its counterpart, the reverse repo rate, which RBI offers to banks for depositing money with RBI, are crucial monetary policy tools that affect liquidity and inflation. The higher the repo rate, the higher the loan rates and the more difficult it is to borrow. The lower the amount of borrowing, the less the money supply since borrowers spend their loans for their purpose. Less spending by borrowers or depositors, who are attracted by higher deposit rates, the lesser the amount of money available in the economy, thereby cooling inflation.

Related:
Repo rates are rising - what should investors do?

Understanding the Reverse Repo Rate

When a bank has excess money, it can lend to the RBI and get some interest. This interest rate that the RBI offers to banks is the reverse repo rate. The reverse repo rate is a monetary policy tool where the RBI can remove excess liquidity from the economy by offering higher rates.

When banks deposit their money with the RBI, they get government securities in return as collateral.

What's next? You can join the Arthgyaan WhatsApp community

You can stay updated on our latest content and learn about our webinars. Our community is fully private so that no one, other than the admin, can see your name or number. Also, we will not spam you.

To understand how this article can help you:

If you have a comment or question about this article

The following button will open a form with the link of this page populated for context:

If you liked this article, please leave us a rating

The following button will take you to Trustpilot:

Discover an article from the archives

Previous and next articles:

<p>LIC has relaunched its popular online-only term insurance plan as “New Tech Term” in Nov-2022. If you are looking for a new term insurance policy should you consider this?</p>
Insurance Review
A review of the LIC Tech Term plan in 2023

LIC has relaunched its popular online-only term insurance plan as “New Tech Term” in Nov-2022. If you are looking for a new term insurance policy should you consider this?

Published: 11 January 2023

5 MIN READ


<p>This article shows new investors’ steps to choosing their first mutual fund.</p>
Mutual Funds Step by step Reader Questions
What are the best mutual funds for first-time investors?

This article shows new investors’ steps to choosing their first mutual fund.

Published: 18 January 2023

8 MIN READ


Latest articles:

<p>This article provides a clear guide to navigating the insurance requirements when securing a home loan, helping you make informed decisions.</p>
House Purchase Loans Insurance
Understanding Insurance Requirements for Home Loans in India: What's Mandatory and What's Optional?

This article provides a clear guide to navigating the insurance requirements when securing a home loan, helping you make informed decisions.

Published: 15 May 2024

3 MIN READ


<p>This article discusses the steps for investors in high-income brackets but hesitant to commit to a home loan due to the fear of job instability.</p>
Behaviour House Purchase Loans
How to manage a home loan if you are worried about job loss?

This article discusses the steps for investors in high-income brackets but hesitant to commit to a home loan due to the fear of job instability.

Published: 14 May 2024

8 MIN READ


Topics you will like:

Asset Allocation (21) Basics (8) Behaviour (13) Budgeting (12) Calculator (25) Case Study (6) Children (17) Choosing Investments (40) FAQ (12) FIRE (13) Gold (22) Health Insurance (5) House Purchase (33) Insurance (17) International Investing (12) Life Stages (2) Loans (20) Market Data (8) Market Movements (17) Mutual Funds (47) NPS (8) NRI (19) News (18) Pension (8) Portfolio Construction (53) Portfolio Review (27) Reader Questions (8) Real Estate (7) Research (5) Retirement (38) Review (16) Risk (6) Safe Withdrawal Rate (5) Set Goals (28) Step by step (15) Tax (59)

Next steps:

1. Email me with any questions.

2. Use our goal-based investing template to prepare a financial plan for yourself.

Don't forget to share this article on WhatsApp or Twitter or post this to Facebook.

Discuss this post with us via Facebook or get regular bite-sized updates on Twitter.

More posts...

Disclaimer: Content on this site is for educational purpose only and is not financial advice. Nothing on this site should be construed as an offer or recommendation to buy/sell any financial product or service. Please consult a registered investment advisor before making any investments.

This post titled What is the latest RBI repo rate? What is the latest RBI reverse repo rate? first appeared on 15 Jan 2023 at https://arthgyaan.com


We are currently at 401 posts and growing fast. Search this site:
Copyright © 2021-2024 Arthgyaan.com. All rights reserved.