The repo rate (Repurchase Agreement Rate) is the interest rate at which the Reserve Bank of India (RBI) lends money to commercial banks against government securities. As of November 2026, the current RBI repo rate stands at 5.50%, following a 25 bps hike on October 7, 2026.
Quick Answer: Current Repo Rate = 5.50% (effective October 7, 2026)
What is Repo Rate in India?
| Term | Details |
|---|---|
| Full Form | Repurchase Agreement Rate |
| Current Rate | 5.50% (November 2026) |
| Set By | RBI Monetary Policy Committee (MPC) |
| Purpose | Control inflation, manage liquidity, regulate money supply |
| Last Changed | October 7, 2026 (+25 bps) |
Repo rate is the benchmark interest rate at which the Reserve Bank of India lends short-term funds to commercial banks when they face a shortage of money. Banks pledge government securities (bonds) as collateral, and agree to repurchase them at a predetermined price — hence the name Repurchase Agreement.
When the RBI increases the repo rate, borrowing becomes more expensive for banks, which tightens the money supply and helps control inflation. When it decreases the repo rate, borrowing becomes cheaper, encouraging lending and economic growth.
What is Repo Rate and Reverse Repo Rate?
Understanding the difference between repo rate and reverse repo rate is essential for grasping India's monetary policy framework.
| Parameter | Repo Rate | Reverse Repo Rate |
|---|---|---|
| Definition | Rate at which RBI lends money to banks | Rate at which RBI borrows money from banks |
| Current Rate (Nov 2026) | 5.50% | 3.35% |
| Purpose | Controls inflation by managing liquidity | Absorbs excess liquidity from the banking system |
| Collateral | Banks pledge government securities to RBI | RBI pledges government securities to banks |
| Impact on Loans | Higher repo rate → costlier loans | No direct impact on loan rates |
| Relationship | Always higher | Always lower than repo rate |
Standing Deposit Facility (SDF) Rate
Since April 2022, the RBI introduced the Standing Deposit Facility (SDF) as the new floor rate, effectively replacing the reverse repo rate for day-to-day liquidity absorption. The current SDF rate is 5.25% (November 2026). While the fixed reverse repo rate remains at 3.35%, the SDF rate is the operative lower bound of the interest rate corridor.
Current Repo Rate and Key RBI Policy Rates (November 2026)
| Policy Rate | Current Rate |
|---|---|
| Policy Repo Rate | 5.50% |
| Standing Deposit Facility (SDF) Rate | 5.25% |
| Marginal Standing Facility (MSF) Rate | 5.75% |
| Bank Rate | 5.75% |
| Fixed Reverse Repo Rate | 3.35% |
| Cash Reserve Ratio (CRR) | 3.00% |
| Statutory Liquidity Ratio (SLR) | 18.00% |
The next RBI MPC meeting is scheduled for December 2–4, 2026.
Repo Rate Changes in 2025–2026
2025: The Easing Cycle (125 bps Total Cuts)
After holding the repo rate steady at 6.50% throughout 2024, the RBI began an aggressive easing cycle in 2025:
| Date | Repo Rate | Change | MPC Decision |
|---|---|---|---|
| February 7, 2025 | 6.25% | -25 bps | First cut after extended pause |
| April 9, 2025 | 6.00% | -25 bps | Continued easing |
| June 6, 2025 | 5.50% | -50 bps | Aggressive cut to boost growth |
| December 5, 2025 | 5.25% | -25 bps | Continuation of easing |
2026: Pause and Pivot to Tightening
In 2026, the RBI paused rate cuts for most of the year before making a surprise hike:
| Date | Repo Rate | Change | MPC Decision |
|---|---|---|---|
| February 2026 | 5.25% | Unchanged | Evaluating cumulative impact of cuts |
| April 2026 | 5.25% | Unchanged | Pause maintained |
| June 2026 | 5.25% | Unchanged | Pause maintained |
| August 2026 | 5.25% | Unchanged | Pause maintained |
| October 7, 2026 | 5.50% | +25 bps | Rate hike — stance shifted to "calibrated tightening" |
The October 2026 hike was driven by geopolitical tensions, re-escalating conflict in West Asia, and rising crude oil price volatility. The MPC unanimously voted to raise the rate and shifted the monetary policy stance to calibrated tightening.
Complete Repo Rate History (2000–2026)
The RBI introduced the repo rate under the Liquidity Adjustment Facility (LAF) in June 2000. Here is the complete historical timeline of major repo rate changes.
2020–2026: Pandemic, Recovery, and Beyond
| Effective Date | Repo Rate | Change | Context |
|---|---|---|---|
| October 7, 2026 | 5.50% | +25 bps | Calibrated tightening due to geopolitical risks |
| December 5, 2025 | 5.25% | -25 bps | Continued easing |
| June 6, 2025 | 5.50% | -50 bps | Aggressive growth boost |
| April 9, 2025 | 6.00% | -25 bps | Easing cycle |
| February 7, 2025 | 6.25% | -25 bps | First cut after 11-meeting pause |
| February 8, 2023 | 6.50% | +25 bps | Peak of post-pandemic tightening |
| December 7, 2022 | 6.25% | +35 bps | Inflation cooling |
| September 30, 2022 | 5.90% | +50 bps | Aggressive tightening |
| August 5, 2022 | 5.40% | +50 bps | Front-loaded hikes |
| June 8, 2022 | 4.90% | +50 bps | Accelerated normalization |
| May 4, 2022 | 4.40% | +40 bps | Off-cycle emergency hike |
| May 22, 2020 | 4.00% | -40 bps | All-time low — COVID-19 pandemic relief |
| March 27, 2020 | 4.40% | -75 bps | Emergency pandemic cut |
2015–2019: Pre-Pandemic Easing
| Effective Date | Repo Rate | Change |
|---|---|---|
| October 4, 2019 | 5.15% | -25 bps |
| August 7, 2019 | 5.40% | -35 bps |
| June 6, 2019 | 5.75% | -25 bps |
| April 4, 2019 | 6.00% | -25 bps |
| February 7, 2019 | 6.25% | -25 bps |
| August 1, 2018 | 6.50% | +25 bps |
| June 6, 2018 | 6.25% | +25 bps |
| August 2, 2017 | 6.00% | -25 bps |
| October 4, 2016 | 6.25% | -25 bps |
| April 5, 2016 | 6.50% | -25 bps |
| September 29, 2015 | 6.75% | -50 bps |
| June 2, 2015 | 7.25% | -25 bps |
| March 4, 2015 | 7.50% | -25 bps |
| January 15, 2015 | 7.75% | -25 bps |
2010–2014: High Inflation Tightening
| Effective Date | Repo Rate | Change |
|---|---|---|
| January 28, 2014 | 8.00% | +25 bps |
| October 29, 2013 | 7.75% | +25 bps |
| September 20, 2013 | 7.50% | +25 bps |
| May 3, 2013 | 7.25% | -25 bps |
| March 17, 2011 | 6.75% | +25 bps |
| January 25, 2011 | 6.50% | +25 bps |
| November 2, 2010 | 6.25% | +25 bps |
| September 16, 2010 | 6.00% | +25 bps |
| July 27, 2010 | 5.75% | +25 bps |
| July 2, 2010 | 5.50% | +25 bps |
| April 20, 2010 | 5.25% | +25 bps |
| March 19, 2010 | 5.00% | +25 bps |
2005–2009: Global Financial Crisis
| Effective Date | Repo Rate | Change |
|---|---|---|
| April 21, 2009 | 4.75% | -25 bps |
| March 5, 2009 | 5.00% | -50 bps |
| January 5, 2009 | 5.50% | -100 bps |
| December 8, 2008 | 6.50% | -100 bps |
| November 3, 2008 | 7.50% | -50 bps |
| October 20, 2008 | 8.00% | -100 bps |
| July 30, 2008 | 9.00% | +50 bps |
| June 25, 2008 | 8.50% | +50 bps |
| June 12, 2008 | 8.00% | +75 bps |
2000–2004: LAF Framework Launch
| Effective Date | Repo Rate | Change |
|---|---|---|
| October 27, 2004 | 5.00% | — |
| August 25, 2003 | 4.75% | — |
| March 3, 2003 | 4.50% | — |
| October 30, 2002 | 5.00% | — |
| August 9, 2000 | 16.00% | All-time high |
Repo Rate Formula
The repo rate itself is a policy rate decided by the RBI's Monetary Policy Committee — it is not calculated using a formula. However, the interest on a repo transaction is calculated as follows:
Formula for Repo Transaction Interest
Interest = Principal × (Repo Rate / 100) × (n / 365)
Where:
- Principal = Amount borrowed by the bank (selling price of pledged securities)
- Repo Rate = Current RBI policy rate (5.50% as of November 2026)
- n = Number of days the money is borrowed
Repo Rate Calculation Example
Scenario: A commercial bank borrows ₹100 Crore from the RBI for 14 days at the current repo rate of 5.50%.
Calculate Interest
Interest = ₹100,00,00,000 × (5.50 / 100) × (14 / 365) = ₹2,10,95,890
Calculate Repurchase Price
Repurchase Price = ₹100,00,00,000 + ₹2,10,95,890 = ₹102,10,95,890
Bank Buys Back Securities
After 14 days, the bank pays ₹102.11 Crore to buy back its government securities from the RBI — the extra ₹2.11 Crore is the cost of borrowing at the repo rate.
Reverse Repo Rate Formula
Interest Earned = Deposit Amount × (Reverse Repo Rate / 100) × (n / 365)
In a reverse repo, commercial banks deposit excess funds with the RBI and earn interest at the reverse repo rate (or now the SDF rate).
How Repo Rate Affects You
Impact on Home Loans and EMIs
| Repo Rate Change | Effect on Borrowers |
|---|---|
| Rate Increase | Floating-rate loan EMIs go up; new loan interest rates increase |
| Rate Decrease | Floating-rate loan EMIs come down; borrowing becomes cheaper |
| No Change | EMIs remain stable |
Most home loans, car loans, and personal loans in India are linked to an External Benchmark Lending Rate (EBLR), which directly tracks the repo rate. When the repo rate changes, banks must pass on the adjustment within 3 months.
Impact on the Economy
- Higher Repo Rate → Reduced money supply → Controls inflation → Slows economic activity
- Lower Repo Rate → Increased money supply → Boosts spending and investment → Stimulates growth
Repo Rate Update: What to Expect Next
The RBI's October 2026 decision to raise the repo rate by 25 bps and shift to a calibrated tightening stance signals caution about:
- Rising crude oil prices due to West Asia geopolitical tensions
- Global inflationary pressures affecting import costs
- Food price volatility from unpredictable weather patterns
The next MPC meeting (December 2–4, 2026) will be closely watched. Markets expect the RBI to either maintain the rate at 5.50% or consider another small hike depending on inflation data.