RBI Raises Repo Rate: What It Means For Your Loans, EMIs And Savings

The Reserve Bank of India has raised the repo rate by 25 basis points to 5.5 per cent, marking its first rate hike since February 2023. The move comes amid concerns over rising inflation, higher crude oil prices, weather disruptions and global economic uncertainty. Lower reservoir levels and drought concerns in several states could also affect agricultural output and food prices. The rate hike may make home, vehicle and personal loans more expensive, particularly for borrowers with floating-rate loans. Banks could also raise deposit rates, potentially benefiting savers. The RBI has shifted its policy stance from ‘neutral’ to ‘calibrated tightening’, signalling a focus on controlling inflation. At the same time, the central bank has raised its FY27 growth forecast, balancing inflation concerns with continued economic activity.