RBI keeps repo rate unchanged: What it means for your home and car loan EMIs
The Reserve Bank of India has kept the repo rate unchanged at 5.25 percent for the fifth consecutive policy review. The decision means home loan, car loan and personal loan EMIs are expected to remain unchanged for borrowers.
Mumbai (The Uttam Hindu): The Reserve Bank of India (RBI) has provided relief to borrowers by keeping the repo rate unchanged, ensuring that loan EMIs will remain stable for now. Amid global economic uncertainty and ongoing geopolitical tensions in the Middle East, the central bank has decided not to alter its key policy rate, offering reassurance to millions of customers with home, car and personal loans.
The decision was announced by RBI Governor Sanjay Malhotra while presenting the outcome of the third bi-monthly Monetary Policy Committee (MPC) meeting for the financial year 2026-27. The repo rate has been retained at 5.25 percent, marking the fifth consecutive policy review in which the central bank has left the rate unchanged. RBI said its priority remains balancing economic growth with inflation control. As a result, borrowers with floating-rate loans are unlikely to see any increase in their monthly EMIs.
The last change in the repo rate came in October 2025, when the RBI reduced it by 25 basis points. Since then, the policy rate has remained unchanged in the December, February, April, June and now August monetary policy meetings. During 2025, the central bank had cut the repo rate by a cumulative 125 basis points (1.25 percentage points) over three policy reviews to support economic activity. However, with inflation concerns persisting and GDP growth expected to moderate, the RBI has opted to maintain the current rate.
The repo rate is the interest rate at which the RBI lends money to commercial banks. When the repo rate rises, borrowing becomes more expensive for banks, which often pass on the higher cost to customers through increased lending rates. This typically results in higher EMIs for home, car and other loans. Conversely, when the repo rate remains unchanged, loan interest rates are generally expected to stay stable, meaning borrowers are unlikely to face any immediate increase in their monthly repayments.