RBI Keeps Repo Rate Steady at 5.25 Percent: Sanjay Malhotra
The Reserve Bank of India (RBI) has not changed the repo rate in its second monetary policy review meeting for the financial year 2026-27, maintaining it at 5.25 percent. This decision will prevent an increase in home and car loan costs and will not raise EMIs.
RBI Governor Sanjay Malhotra announced this decision after the three-day bi-monthly review meeting of the Monetary Policy Committee (MPC) on Friday. Malhotra stated that the MPC has kept a neutral stance and maintained the policy rate at 5.25 percent in the second monetary review of the current financial year. He also projected a GDP growth estimate of 6.6 percent for the financial year 2026-27.
Malhotra expressed confidence that amidst global uncertainties, the country would overcome challenges and emerge stronger. He mentioned that the GDP growth estimate for this year is now 6.6 percent, down from the previous estimate of 6.9 percent. The estimates for the current financial year's first quarter is 6.6 percent, the second quarter is 6.3 percent, the third quarter is 6.5 percent, and the fourth quarter is 6.8 percent.
The MPC consists of six members, three of whom are from the Reserve Bank, while the others are appointed by the central government. The RBI holds a monetary review meeting every two months. There will be a total of six meetings of the monetary review committee in the financial year 2026-27, with the first meeting having taken place from April 6-8, 2026.
The repo rate is the interest rate at which the RBI lends to banks. A lower repo rate means banks can borrow at a lower interest rate. When banks receive loans at a cheaper rate, they often pass on the benefits to customers by reducing their interest rates.
It is noteworthy that in the MPC review meeting in April, the RBI unanimously adopted a neutral stance and kept the repo rate at 5.25 percent. The last time the RBI reduced the policy interest rate was in December 2025, when it was cut by 0.25 percent to 5.25 percent.
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