What the repo rate means for your EMI
Source: Reserve Bank of India · Last updated April 2026
Current repo rate
5.25%
Change since Dec 2024
-1.25%
The repo rate is the interest rate at which the Reserve Bank of India lends money to commercial banks. As of April 2026, the repo rate stands at 5.25%. The RBI has cut the rate by a cumulative 125 basis points (1.25%) since December 2024, bringing it down from 6.50%.
Why it matters to you
If you have a home loan or any loan with a floating interest rate, a change in the repo rate can directly change your EMI. A lower repo rate generally means lower EMIs over time, while a higher rate means the opposite.
EMI Impact Example
A 1.25% rate cut has saved you ~₹3,587 per month on this loan
The bigger picture
The RBI adjusts the repo rate mainly to control inflation. The RBI’s inflation target is 4% with a tolerance band of ±2%. When inflation rises above the target, the RBI may raise rates to cool down the economy. Currently, inflation has been below the target, with CPI at 3.48% in April 2026.
What to watch for
- MPC meetings: The Monetary Policy Committee meets every 2 months. The next meeting is scheduled for June 3-5, 2026.
- Inflation data: The RBI’s target is 4% inflation. Higher inflation usually means higher rates.
- Global trends: US Fed rate changes often influence RBI decisions.
Source
Reserve Bank of India, Monetary Policy Committee statements (April 2026). Figures reflect the most recent policy announcement.