As the Reserve Bank of India (RBI) and other central banks navigate an increasingly complex global landscape, investors, economists, and policymakers are keenly awaiting potential repo rate adjustments. With the MPC meeting between June 4-6, 2025, all eyes are on whether it will deliver a third consecutive repo rate cut, the implications extend far beyond domestic markets. In emerging economies, repo rate trends reflect unique economic landscapes shaped by inflation, fiscal policies, and global dynamics.
In this blog, we will explore the repo rate trends of some key emerging economies, with a special focus on RBI repo rate trends in India, and examine how these rate changes impact both local markets and global financial stability.
Understanding Repo Rate Trends
Repo rate is the rate at which central banks lend short-term money to commercial banks. The objective behind this rate is to control inflation and stabilise the economy by regulating the cost of borrowing. Repo rate changes affect everything from loan interest rates to consumer spending and investment patterns.
Why Compare Countries?
Every economy faces its unique challenges, but there is still much to learn from how others respond to similar problems. Comparing the movements of repo rates helps paint a clearer picture of how each central bank responds to inflation, currency volatility, and financial stress.
We are focusing on countries like India that are working to grow while keeping inflation and external risks in check. These include:
- Brazil
- South Africa
- Indonesia
- Thailand
- The Philippines
Each of these has an inflation-targeting regime and an active monetary policy. While their circumstances differ, they offer valuable insight into the diverse ways emerging markets use repo rates.
A Snapshot of Trends: 2015 to 2025
Here is a simplified overview of how the repo rate has shifted in these economies over the past decade.
| Country | 2015-2020 Direction | 2020-2022 Approach | 2022-2025 Focus |
| India | Cautious reductions | Strong rate cuts | Gradual tightening |
| Brazil | Aggressive cycles | Deep rate slashes | Fast-paced hikes |
| South Africa | Variable movements | Emergency easing | Rapid normalisation |
| Indonesia | Mild adjustments | Careful reductions | Moderate rate increases |
| Thailand | Steady and slow | Extended low-rate period | Cautious return to normal |
| Philippines | Mixed, inflation-led | Quick cuts | A series of inflation-led hikes |
Each line in the table reflects a story of crisis, recovery and adaptation. While some nations reacted quickly, others allowed more time before making changes.
India
| Rate Type | Rate |
| Repo Rate | 6.00% |
| Bank Rate | 6.25% |
| Reverse Repo Rate | 3.35% |
| Marginal Standing Facility Rate | 6.25% |
India’s central bank, the RBI, has been adjusting its repo rate trends with a strategic focus on controlling inflation while supporting economic growth. The RBI uses its repo rate to influence liquidity in the banking system and achieve its dual mandate: to control inflation and maintain economic growth.
Brazil
| The benchmark interest rate in Brazil was last recorded at 14.25% |
Brazil’s central bank has a reputation for acting fast. When inflation takes off, they don’t wait. They lift rates even when growth is weak. By doing so, they prioritise stability. This can make borrowing more expensive in the short run but helps control runaway prices.
They were among the first to hike aggressively after the global slowdown. Their bold moves made it clear they wouldn’t let inflation spiral.
South Africa
| The benchmark interest rate in South Africa was last recorded at 7.25% |
For South Africa, the strength of the local currency is a constant concern. When the Rand weakens, it can drive up import prices. That pushes inflation higher. To contain it, the central bank often steps in with rate increases.
The repo rate in South Africa strikes a balance between combating inflation and promoting low growth. While they cut rates sharply during the crisis, the rebound in inflation led to quick hikes.
Indonesia
| The benchmark interest rate in Indonesia was last recorded at 5.75% |
Indonesia tends to take smaller steps. Their central bank prefers to wait for more evidence before adjusting rates. This patience helps keep markets stable, though it can delay responses to new challenges.
They eased policy gradually in tough times and didn’t rush to raise rates afterwards. It shows a commitment to measured decisions over dramatic shifts.
Thailand
| The repo rate in thailand was last recorded at 1.75% |
A preference for clear communication and consistency shapes Thailand’s monetary policy. The central bank kept rates low for an extended period, despite inflation rising slightly. The idea was to nurture recovery without triggering panic.
Even when raising rates, the steps were small. They made sure financial institutions and businesses had time to adapt.
Philippines
| The benchmark interest rate in Philippines was last recorded at 5.75% |
Food and fuel prices often drive inflation in the Philippines. As a result, the central bank must respond promptly. Even if the inflation is due to supply problems, interest rate hikes are used to show a commitment to price control.
This sometimes means rapid swings in repo rate policy. Quick to cut, but just as quick to hike when prices start climbing.
Comparing Strategy and Tone
Each country’s central bank takes a slightly different approach. These differences go beyond numbers—they show varying attitudes toward economic risks.
| Country | Rate Action Speed | Growth vs Inflation Focus | Market Communication |
| India | Moderate | Balanced | Cautious |
| Brazil | Fast | Inflation-first | Direct |
| South Africa | Quick when needed | Currency-sensitive | Alert |
| Indonesia | Slow | Stability-oriented | Measured |
| Thailand | Very slow | Growth-prioritised | Transparent |
| Philippines | Fast | Inflation-prioritised | Reactive |
Lessons India Can Draw
Looking at other countries can help shape a stronger repo policy. Some lessons that stand out include:
- Clear communication keeps markets calm. Thailand does this well.
- A swift response to currency stress can help prevent further economic damage. South Africa shows the benefits of acting early.
- The flexible policy allows central banks to deal with sudden inflation shocks. Brazil’s willingness to act quickly offers a useful example.
- Measured pacing like Indonesia’s can reduce the risk of overcorrection.
India does many of these things already. However, refining each step, especially in terms of transparency and global coordination—could enhance effectiveness.
Challenges Moving Forward
Emerging economies face plenty of challenges, including:
- Geopolitical events that affect oil or food supply chains
- Currency instability triggered by global investment shifts
- High levels of external debt
- The ongoing need to balance inflation control with social spending
Repo rate decisions in the next few years will need to be more flexible. That means shorter reaction windows, better data interpretation, and the willingness to change course if things evolve unexpectedly.
Wrapping It Up
Comparing India’s repo rate journey with that of other emerging economies reveals a clear pattern: there is no one-size-fits-all solution. Every nation makes choices based on its own pressures and priorities. What matters most is clarity of purpose, responsiveness, and a steady hand.
India’s approach—rooted in caution and balance—has served it well. However, as the global environment becomes increasingly complex, there is room to adapt. Watching peers, sharing experiences, and staying alert to both local and international shifts will help shape a stronger future for monetary policy.
