Repo Rate
The interest rate at which the RBI lends short-term funds to commercial banks — India's key policy interest rate.
The repo rate is the RBI's primary tool for controlling inflation and growth. Raising the repo rate makes borrowing costlier across the economy — banks pass higher rates on to loans — which tends to cool inflation but also growth and rate-sensitive sectors (banking margins, real estate, auto financing). Cutting it does the reverse, aiming to stimulate borrowing and spending.
The Monetary Policy Committee (MPC) reviews the repo rate roughly every two months; the decision, and even more so the RBI Governor's forward guidance on future moves, is one of the most closely watched events in the Indian market calendar.
Example
'RBI holds repo rate at 6.50% for the seventh consecutive meeting' signals policy stability — markets generally read an unchanged, well-telegraphed rate as neutral-to-mildly-positive, since it removes uncertainty.