The RBI's 25-basis-point hike takes the repo rate to 5.50 per cent. But what does that number actually mean for you?

The repo rate is the interest rate at which the RBI lends money to commercial banks. When it rises, banks' borrowing costs go up, and they usually pass that on to customers.

For borrowers, this means home loan and car loan EMIs could rise. If you have a floating-rate loan, your bank may increase your EMI or extend your loan tenure in the coming months.

For savers, there is a silver lining: banks may raise fixed deposit rates to attract deposits, though this usually happens with a lag.

Why did the RBI act? Inflation is projected at 5.2 per cent, and the central bank wants to keep price rises in check. Its new "calibrated tightening" stance signals it may raise rates further.

The 7.1 per cent GDP growth forecast shows the economy is still expanding strongly. The RBI is trying to cool prices without stalling growth, a delicate balancing act.