The three-day meeting of the Monetary Policy Committee of RBI will start from today i.e. October 5. Experts believe that this time the Reserve Bank may increase the repo rate by 0.25%. If this happens, this will be the first increase in the repo rate after February 2023, due to which the repo rate will increase from 5.25% to 5.50%. RBI Governor Sanjay Malhotra will give information about the decisions taken in this meeting on October 7. After 1.25% cut in 2025, the rates were stable in 4 consecutive meetings. Reserve Bank increased the repo rate by 1.25% 4 times in the year 2025. Due to this the repo rate came down from 6.50% to 5.25%. There has been no change in the repo rate in the four meetings held so far in 2026. The festive season will affect the pockets and loans of customers. This October meeting is being held during the peak festive season of the country. During this period, the demand for credit i.e. loans in automobiles, electronics and housing segments is high. If RBI increases the repo rate by 0.25%, the External Benchmark Lending Rates (EBLR) of banks will increase immediately. This will make new loans costlier and EMIs for existing home loan and auto loan customers may increase, which may impact consumer demand during the festive season. What is repo rate and how does it relate to you? Why does the Reserve Bank increase and decrease the repo rate? Repo rate is a tool to fight inflation. When inflation is high, the Central Bank tries to reduce money flow in the economy by increasing it. If the policy rate is high then the loan that banks get from the Central Bank will be expensive. In return, banks make loans costlier for customers. This reduces money flow in the economy. When money flow decreases, demand decreases and inflation decreases. When the economy goes through a bad phase, there is a need to increase money flow for recovery. In such a situation, the Central Bank reduces the policy rate. Due to this, the loan received by the banks from the Central Bank becomes cheaper and the customers also get the loan at a cheaper rate.
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3 day meeting of RBI from today: Repo rate may increase by 0.25%, this will make taking loan expensive; EMI will also increase
