RBI keeps repo rate unchanged at 5.5%
What's the story
The Reserve Bank of India's (RBI) Monetary Policy Committee (MPC), led by Governor Sanjay Malhotra, has decided to keep the repo rate unchanged at 5.5%. This marks a pause after 100 basis points of rate cuts earlier this year. The policy stance remains "neutral", indicating readiness to shift either way based on incoming data on growth and inflation. The decision aims to maintain stability amid global economic uncertainties, including US President Donald Trump's new tariff threats.
Economic outlook
GDP growth projection maintained at 6.5% for FY26
The RBI has maintained its GDP growth projection at 6.5% for FY26, while revising the CPI inflation downwards to 3.1% from an earlier estimate of 3.7%. Despite the prevailing challenges, Malhotra remains optimistic about India's economic prospects in the changing global order, citing its inherent strength and robust fundamentals as key factors driving monetary policy transmission during this easing cycle.
Financial implications
No immediate change in EMIs for existing borrowers
The RBI's decision to keep the repo rate unchanged means no immediate change in EMIs for existing borrowers. For new borrowers, interest rates on home, auto, and personal loans are likely to remain stable. This will ensure that loan affordability remains unchanged in the short term. As a result of this decision, deposit interest rates are also expected to remain stable for now.