RBI Monetary Policy: Repo rate up by 50bps; here's how it will impact you

On Friday, RBI increased the repo rate by 50 basis points taking the key repo rate to 5.9%; here is why it should matter to you

On Friday, the Reserve Bank of India (RBI) raised the repo rate (repurchase rate) for the fourth time in a row. The RBI's Monetary Policy Committee (MPC) decided to raise the policy rate by 50 basis points (1 basis point= 1/100th of a per cent). Repo rate refers to the interest rate at which commercial banks borrow short-term funds from the RBI by selling their securities to the Reserve Bank. After Friday's announcement, the new repo rate stands at 5.9 per cent, while the reverse repo rate continues to stand at 3.35 per cent.

According to experts, a higher interest