The Reserve Bank of India (RBI) has once again revised the repo rate. As of June 6, 2025, the current repo rate stands at 5.50%, down from 6.00%—marking a 50 basis points (bps) cut. This significant move is aimed at reviving economic activity amidst slowing growth, but how does it affect home loan EMIs, inflation, and your overall borrowing cost?
In this article, we dive into the latest repo rate, its impact, RBI’s repo rate history, and key differences between repo rate vs reverse repo rate, MCLR, and more.
🔔 Latest Update: RBI Repo Rate Cut – June 2025
| Effective Date | Repo Rate | Change |
|---|---|---|
| 6 June 2025 | 5.50% | -0.50% |
According to LiveMint and Hindustan Times, this is part of RBI’s broader strategy to stimulate lending and boost spending. However, transmission to loan EMIs may take time due to banks’ internal rate reset schedules.
What is the Repo Rate?
The repo rate is the rate at which the RBI lends money to commercial banks. It is a monetary tool to control inflation and manage liquidity.
Low repo rate = cheaper loans, increased spending = growth boost
High repo rate = costlier loans, lower spending = inflation control
RBI Repo Rate History (2005 to 2025)
Here’s a comprehensive table showing how the repo rate in India has changed over the last two decades:
| Effective Date | Repo Rate | %Change |
| 6 June 2025 | 5.50% | 0.50% |
| 9 April 2025 | 6.00% | 0.25% |
| 7 February 2025 | 6.25% | 0.25% |
| 6 December 2024 | 6.50% | |
| 18 September 2024 | 6.50% | – |
| 8 June 2023 | 6.50% | – |
| 8 February 2023 | 6.50% | 0.25% |
| 7 December 2022 | 6.25% | 0.35% |
| 30 September 2022 | 5.90% | 0.5% |
| 5 August 2022 | 5.40% | 0.5% |
| 8 June 2022 | 4.90% | 0.5% |
| May 2022 | 4.40% | 0.4% |
| 09 Oct 2020 | 4.00% | 0.00% |
| 06 Aug 2020 | 4.00% | 0.00% |
| 22 May 2020 | 4.00% | 0.40% |
| 27 March 2020 | 4.40% | 0.75% |
| 6 February 2020 | 5.15% | 0.25% |
| 07 August 2019 | 5.40% | 0.35% |
| 06 June 2019 | 5.75% | 0.25% |
| 04 April 2019 | 6.00% | 0.25% |
| 07 February 2019 | 6.25% | 0.25% |
| 01 August 2018 | 6.50% | 0.25% |
| 06 June 2018 | 6.25% | 0.25% |
| 02 August 2017 | 6.00% | 0.25% |
| 04 October 2016 | 6.25% | 0.25% |
| 05 April 2016 | 6.50% | 0.25% |
| 29 September 2015 | 6.75% | 0.50% |
| 02 June 2015 | 7.25% | 0.25% |
| 04 March 2015 | 7.50% | 0.25% |
| 15 January 2015 | 7.75% | 0.25% |
| 28 January 2014 | 8.00% | -0.25% |
| 29 October 2013 | 7.75% | -0.25% |
| 20 September 2013 | 7.50% | -0.25% |
| 03 May 2013 | 7.25% | -0.50% |
| 17 March 2011 | 6.75% | -0.25% |
| 25 January 2011 | 6.50% | -0.25% |
| 02 November 2010 | 6.25% | -0.25% |
| 16 September 2010 | 6.00% | -0.25% |
| 27 July 2010 | 5.75% | -0.25% |
| 02 July 2010 | 5.50% | -0.25% |
| 20 April 2010 | 5.25% | -0.25% |
| 19 March 2010 | 5.00% | -0.25% |
| 21 April 2009 | 4.75% | 0.25% |
| 05 March 2009 | 5.00% | 0.50% |
| 05 January 2009 | 5.50% | 1.00% |
| 08 December 2008 | 6.50% | 1.00% |
| 03 November 2008 | 7.50% | 0.50% |
| 20 October 2008 | 8.00% | 1.00% |
| 30 July 2008 | 9.00% | -0.50% |
| 25 June 2008 | 8.50% | -0.50% |
| 12 June 2008 | 8.00% | -0.25% |
| 30 March 2007 | 7.75% | -0.25% |
| 31 January 2007 | 7.50% | -0.25% |
| 30 October 2006 | 7.25% | -0.25% |
| 25 July 2006 | 7.00% | -0.50% |
| 24 January 2006 | 6.50% | -0.25% |
| 26 October 2005 | 6.25% | 00.00 |
Impact of Repo Rate Cut on Home Loan EMIs
A repo rate cut generally results in lower home loan EMIs, especially for borrowers with floating interest rates linked to repo or external benchmarks. However, the actual benefit depends on:
- Existing MCLR vs Repo-linked loan
- Your loan reset cycle (quarterly, semi-annual)
- Bank’s internal transmission speed
Repo Rate vs Reverse Repo Rate
| Feature | Repo Rate | Reverse Repo Rate |
|---|---|---|
| Definition | RBI lends to commercial banks | RBI borrows from commercial banks |
| Current Rate (2025) | 5.50% | 3.35% (as per latest available) |
| Purpose | Controls inflation | Manages liquidity |
| Who Benefits? | RBI earns interest | Banks earn interest |
Repo Rate vs MCLR
- Repo Rate: Set by RBI. External benchmark.
- MCLR (Marginal Cost of Funds Based Lending Rate): Internal benchmark of banks to decide loan rates.
- Loans issued after Oct 2019 are usually repo-linked.
How RBI Uses Repo Rate to Control Inflation
If inflation is high, RBI raises repo rate to reduce money supply. When economic slowdown hits, the RBI lowers repo rate to encourage borrowing and investment.
FAQs on RBI Repo Rate
Q1: What is the current repo rate in India?
A: As of June 2025, the current repo rate is 5.50%.
Q2: Who decides the repo rate?
A: The Monetary Policy Committee (MPC) of RBI decides the repo rate based on inflation, growth, and macroeconomic conditions.
Q3: How often is the repo rate reviewed?
A: Every two months during the RBI Monetary Policy Committee (MPC) meetings.
Q4: Does a repo rate cut guarantee lower EMIs?
A: Not immediately. It depends on your loan type and bank’s reset schedule.
Q5: What type of loans are affected by repo rate?
A: Home loans, personal loans, car loans with floating interest linked to repo rate.
