RBI Repo Rate News: What is bps in repo rate?

By Srikanto Mandal 7 December, 2022

The Reserve Bank of India's Monetary Policy Committee (MPC) hiked the key repo rate by 35 bps on December 7.

Repo is the rate at which the Reserve bank of India lends short-term funds to banks.

Here bps stands for basis points. One basis point is one-hundredth of a percentage point.

One basis point is equal to 1/100th of 1%, or 0.01%. 

Basis points (BPS) are used to show changes in the rate of a financial instrument like  repo rate etc.

A 1% change in repo rate is equal to a change of 100 basis points and a 0.01% change is equal to one basis point.

RBI hiked repo rate by 35 bps, so overall changes is (0.01%35) 0.35%.

Earlier repo rate was 5.90%, after 0.35% increase current repo rate is (5.90% + 0.35%) 6.25%.

RBI hiked policy rate to bring down inflation from current levels.