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Basis Point
A basis point, often written bps, is 0.01 percentage points. A rate rising from 5.25% to 5.50% has gone up 25 basis points. Using basis points avoids the confusion of saying a rate “rose 0.25%”, which could mean either a quarter of a percentage point or a quarter of a percent of the rate itself.
Why It Matters
When money is measured in lakhs of crores, a quarter of a percentage point is a lot of rupees.
In India
The RBI cut the repo rate by 125 basis points across 2025, then raised it by 25 basis points on October 7, 2026.
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