Latest bank decision: At its meeting on 15 May, the Central Bank decided to lower the target for the overnight...
RBI Repurchase Rate in India
India's monetary policy over the last decade was characterized by gradual rate cuts prior to the pandemic, to support economic growth while managing inflation. The Reserve Bank of India (RBI) then cut rates significantly during the COVID-19 pandemic to stimulate the economy. However, the RBI then hiked rates in 2022 to tame price pressures and support the rupee. Rates were kept around 2022 levels in 2023 and 2024.
The RBI Repurchase Rate ended 2022 at 6.50%, up from the 4.00% end-2021 value and down from the reading of 8.00% a decade earlier. For reference, the average policy rate in the Asia-Pacific region was 3.70% at end-2022. For more interest rate information, visit our dedicated page.
India Interest Rate Chart
Note: This chart displays Policy Interest Rate (%) for India from 2018 to 2024.
Source: Macrobond.
India Interest Rate Data
| 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|
| RBI Repurchase Rate (%, eop) | 4.00 | 4.00 | 6.50 | 6.50 | 6.25 |
| 10-Year Bond Yield (%, eop) | 6.18 | 6.84 | 7.31 | 7.06 | 6.62 |
RBI cuts rates for second consecutive meeting in April
Second cut in a row: At its meeting on 9 April, the monetary policy committee of the Reserve Bank of India (RBI) unanimously decided to reduce its policy rate by 25 basis points to 6.00%. The decision was in line with market expectations and followed February’s cut, which was the first in nearly five years.
Moderation in food prices supports easing: The key domestic factor influencing the RBI's decision on interest rates was inflation, which has declined notably recently; in particular, food inflation dropped to a 21-month low in February due to a strong seasonal correction in vegetable prices.
More cuts ahead: The monetary policy committee of the RBI voted to change its monetary policy stance from “neutral” to “accommodative”, indicating that the central bank will continue to reduce interest rates going forward. In line with this, our Consensus is for the RBI to cut rates by another 50 basis points by the end of FY 2025 as inflation settles near its 4.0% medium-term target and economic growth suffers from rising global protectionism. The next policy announcement is scheduled for 6 June.
Panelist insight: EIU analysts said: “Risks to growth have risen sharply despite the temporary pause on reciprocal tariffs imposed by the US. We now believe that India’s monetary easing cycle will involve a cumulative 100 basis points of rate cuts across 2025, instead of 75 basis points expected in February.”
Consensus Forecasts and Projections for the next ten years
How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Indian interest rate projections for the next ten years from a panel of 21 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable interest rate forecast available for Indian interest rate.
Download one of our sample reports to visualize what a Consensus Forecast is and see our Indian interest rate projections.
Want to get access to the full dataset of Indian interest rate forecasts? Send an email to info@focus-economics.com.
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