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.

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

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

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

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

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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.

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

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

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

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