The Reserve Bank of India announces its interest rate decision on Wednesday, October 7, and most economists expect a hike. Here is a simple guide to what the decision means for your money.

The key rate is called the repo rate, currently 5.25 percent. It is the rate at which the RBI lends to banks. When the RBI raises it, banks usually raise the interest on home loans, car loans, and personal loans within weeks. Your EMIs could go up. On the flip side, fixed deposit rates also tend to rise, which is good news for savers.

Why hike now? Inflation hit 4.82 percent in August, above the RBI’s comfort zone, and a weak rupee makes imports costlier. With the economy growing at a healthy 7.8 percent, the central bank has room to fight prices without hurting growth. A 25-basis-point rise would take the repo rate to 5.50 percent. Watch the announcement on Wednesday morning for the final call.