New Delhi: If you have a home or auto loan, the Reserve Bank of India’s repo rate decision is important for you. The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) has not made any changes to the repo rate this time. It has been decided to maintain it at 5.25%. This means that for the time being, there will be no immediate increase or decrease in EMIs on eligible floating rate home and auto loans.
Repo Rate Remains at 5.25%
RBI Governor Sanjay Malhotra, while announcing the MPC’s decision, stated that the central bank has maintained its neutral stance. The repo rate remains unchanged at 5.25%. Additionally, the Standing Deposit Facility (SDF) will remain at 5% and the Marginal Standing Facility (MSF) at 5.50%.
According to the RBI, global economic uncertainty persists. Tensions in West Asia and fluctuations in crude oil prices also pose challenges to the economy.
What will be the impact on your EMI?
Since the repo rate remains unchanged, this decision will not have any direct impact on banks’ interest rates. Therefore, EMIs on home or auto loans operating on floating interest rates are expected to remain unchanged for now.
Generally, a decrease in the repo rate can make funds cheaper for banks, and customers can benefit from this in the form of lower interest rates or lower EMIs. However, an increase in the repo rate can lead to higher loan prices.
RBI’s Confidence in the Indian Economy
The RBI has expressed a positive outlook on the Indian economy. The central bank has raised its GDP growth forecast for the fiscal year 2026-27 from 6.6 percent to 6.7 percent. Growth in the first quarter is projected to be 7 percent.
Regarding inflation, the RBI has also lowered its FY27 forecast from 5.1 percent to 5 percent. However, inflation risks remain due to changes in monsoon, food, and fuel prices.
A major cut was made in 2025.
Earlier in 2025, the RBI had cut the repo rate by a total of 125 basis points in several phases. However, for now, the central bank has decided to keep rates stable. Therefore, borrowers should not expect any immediate relief or additional burden on EMIs.