Glossary › Repo Rate
What is Repo Rate?
The interest rate at which a central bank lends to commercial banks — the anchor for loan rates.
The repo (or policy) rate is set by the central bank. When it rises, banks' borrowing costs rise and loan rates follow; when it falls, loans get cheaper. Floating-rate loans move with it.
Example
If the RBI repo is 5.25%, floating home loans sit a few points above it.