RAS question
What is the current repo rate as of February 2025?
Correct answer: (A) 6.25%.
As of the February 2025 Monetary Policy Committee meeting, the RBI's policy repo rate was 6.25%.
Explanation
The February 2025 MPC resolution is the key date here. At its 5-7 February 2025 meeting, the RBI's Monetary Policy Committee unanimously decided to reduce the policy repo rate under the liquidity adjustment facility by 25 basis points to 6.25% with immediate effect. This was the first repo-rate cut since May 2020. That makes 6.25% the current repo rate for the question's February 2025 reference point. The same RBI decision also adjusted linked rates after the cut, which helps separate the repo rate from nearby figures such as 6.00% and 6.50%.
Why the other options are wrong
- (B) 6.00% is lower than the repo rate; in the RBI decision, 6.00% was the adjusted standing deposit facility rate, not the policy repo rate.
- (C) 6.50% was the repo rate before the February 2025 cut and, after the decision, matched the adjusted MSF rate and Bank Rate rather than the repo rate.
- (D) 6.75% is an older rate and does not match the February 2025 MPC decision, which reduced the repo rate to 6.25%.
Concept
This tests monetary policy basics, especially the RBI's repo rate and MPC decisions. It recurs in RAS because current policy rates are standard Indian Economy facts and are often asked around Budget and RBI policy cycles.