India Interest Rate

India Interest Rate

RBI Repurchase Rate in India

India's monetary policy from 2013 to 2022 was generally characterized by gradual rate cuts to support economic growth and manage inflation. The Reserve Bank of India (RBI) 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.

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 2013 to 2022.
Source: Reserve Bank of India.

India Interest Rate Data

2018 2019 2020 2021 2022
RBI Repurchase Rate (%, eop) 6.25 4.40 4.00 4.00 6.50
10-Year Bond Yield (%, eop) 7.35 6.14 6.18 6.84 7.31

RBI stands pat for sixth consecutive meeting in February

On 8 February, the Reserve Bank of India (RBI) left the repo rate unchanged at 6.50% for the fifth month running, as expected by the market. It also left its standing deposit facility and marginal standing facility rates unchanged at 6.25% and 6.75%, respectively. Five board members voted for the decision, while one voted for a 25 basis point cut.

To justify its decision, the RBI argued that past tightening was still “working its way through the economy”—just as it did at its last meeting in December. Inflation remains above the RBI’s 4.0% target; past shocks to food prices—such as last year’s monsoon, which was the weakest in five years—have prevented inflation from declining more sharply. Meanwhile, the RBI said it forecasts inflation to average 4.5% in the fiscal year starting in April and GDP growth to average 7.0%.

The RBI said it would keep its policy stance focused on the “withdrawal of accommodation”, maintaining a hawkish tone. The Consensus is for the RBI to begin lowering interest rates in the next fiscal year, which starts in April. The RBI’s next meeting is due on 3–5 April.

Analysts at Nomura said: “With the economy in an extended Goldilocks period, with strong headline growth, capped core inflation and the risk of higher food inflation, there is little impetus for the RBI to change either its policy rates or stance […]. We maintain our call that the RBI will deliver 100bp of rate cuts cumulatively starting August, with 75bp of cuts in 2024 and another 25bp in Q1 2025.”

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 10 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.

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