The RBI will announce its rate decision on October 7. Most economists expect a 25 basis point hike. Some traders see a chance of 50 basis points. What does this mean for you? The repo rate is the rate at which the RBI lends to banks. It now stands at 5.25 percent. A 25 basis point hike would take it to 5.50 percent. This would be the first hike since February 2023. Banks usually pass rate hikes to borrowers. Home loan and car loan rates may rise. Your equated monthly instalments could go up. New borrowers will face higher interest rates. Existing borrowers on floating rates will feel the impact first. On the positive side, fixed deposit rates could rise. The RBI is hiking because inflation is high. Retail inflation hit 4.82 percent in August. It has stayed above the 4 percent target for three months. Oil prices above 100 dollars a barrel add pressure. A 50 basis point hike could strengthen the rupee but slow growth. A 25 basis point hike is the middle path.