The Reserve Bank of India (RBI) on Wednesday raised the repo rate by 25 basis points to 5.5%, marking its first rate hike in nearly three-and-a-half years, as the central bank seeks to contain rising inflation amid the ongoing West Asia crisis.

Along with the rate hike, the RBI shifted its policy stance to “calibrated tightening”, signalling a reversal from its previous policy approach.

The repo rate hike is expected to push up borrowing costs across home, vehicle and corporate loans, while existing borrowers may also see an increase in their EMIs.