Insights On The Current Repo Rate Change In 2022

Insights On The Current Repo Rate Change In 2022

The Reserve Bank of India (RBI) is the central bank of India that controls the monetary policy of the Indian currency. On 8th June 2022, the repo rate increased from 4.40% to 4.90%. The main goal behind this is to make inflation stable and maintain monetary stability.

When we face a financial crisis we approach the banks. Similarly, banks approach the Reserve Bank of India (RBI) if they face a financial crisis.

What Is Repo Rate?

Repo rate is the rate at which the Central Bank of India i.e RBI lends money to commercial banks to balance the liquidity and fulfill the requirements of businesses.

The RBI repo rate is the most important policy interest rate in India. From time to time as part of the monetary policy review RBI reviews the repo rate.

From the Central Bank of India Banks borrow money with a legal agreement. And the rate of interest charged by RBI is called the Repo Rate.

Here is the history of Repo Rate changes until now. Have a quick look at it from the below table.

Updated DateRepo Rate
8 June 20224.90%
4 May 20224.40%
22 May 20204.00%
27 March 20204.40%
04 October 20195.15%
07 August 20195.40%
06 June 20195.75%
04 April 20196%
07 February 20196.25%
01 August 20186.50%
06 June 20186.25%
07 February 20186.00%
02 August 20176.00%
04 October 20166.25%
05 April 20166.50%
29 September 20156.75%
02 June 20157.25%
04 March 20157.50%
15 January 20157.75%
28 January 20148.00%
29 October 20137.75%
20 September 20137.50%
03 May 20137.25%
17 March 20116.75%
25 January 20116.50%
02 November 20106.25%
16 September 20106.00%
27 July 20105.75%
02 July 20105.50%
20 April 20105.25%
19 March 20105.00%
21 April 20094.75%
05 March 20095.00%
05 January 20095.50%
08 December 20086.50%
03 November 20087.50%
20 October 20088.00%
30 July 20089.00%
25 June 20088.50%
12 June 20088.00%
30 March 20077.75%
31 January 20077.50%
30 October 20067.25%
25 July 20067.00%
24 January 20066.50%
26 October 20056.25%

How does RBI calculate the Repo Rate?

As mentioned above, RBI calculates the Repo Rate based on the inflation of the market of the country. 

Difference Between Reverse Repo Rate and Repo Rate

The Repo rate is the Rate at which the Central Bank lends money from the commercial banks against government securities. While Reverse Repo Rate is the rate of interest given by the Central Bank to the commercial banks that deposit funds in the RBI treasury.

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