New Delhi: The Reserve Bank of India’s (RBI) six-member Monetary Policy Committee (MPC) announced that the repo rate remains unchanged at 5.5 per cent. In its August monetary policy statement, RBI Governor Sanjay Malhotra Wednesday said that the ‘neutral’ policy stance continues even as the tariff situation continues to evolve. In June, the MPC announced a bigger-than-expected 50 basis points (bps) cut.
The CPI inflation for FY26 projected down at 3.1%as compared with 3.7% projected in June.
The monetary policy statement announcement on Wednesday comes after the MPC meeting from August 4 to 6. It was held amid the ongoing rising uncertainties around trade tariffs triggered by US President Donald Trump as well as moderation in headline inflation. With this in mind, the RBI retained the GDP growth forecast for the current fiscal year at 6.5 per cent with risk evenly balanced. Geopolitical tensions pose headwinds, Guv Malhotra added.
Repo rate value: Now, the interest rate that the central bank charges when commercial banks borrow money from it is called the repo rate. The interest rate the RBI pays commercial banks when they park their excess cash is called the reverse repo rate. When the RBI wants to encourage economic activity in the economy, it reduces the repo rate to enable commercial banks to bring down the interest rates they charge (on their loans) as well as the interest rate they pay on deposits. This, in turn, incentivises people to spend money.
Mr. Pradeep Aggarwal, Founder & Chairman, Signature Global, said, “The RBI’s decision to maintain the repo rate at its current level reflects a steady approach to supporting economic recovery amid stable inflation. With borrowing costs significantly reduced following three consecutive rate cuts, the current policy stance ensures continued affordability, as rates remain at comfortable levels. This is expected to sustain consumer confidence and support ongoing momentum in key sectors, including real estate.”
“The unchanged policy stance is set to keep the real estate sector’s growth momentum on track. With steady interest rates and strong consumer confidence, developers are expected to meet the sustained demand for quality housing through greater focus on new offerings. This sustained activity will further strengthen the real estate sector’s contribution to GDP growth, job creation, and the expansion of urban infrastructure in the coming quarters.” He added.
Mr. Piyush Bothra, co-founder and CFO, Square Yards, said, “The decision to maintain the repo rate at its current level reflects a ‘watchful waiting’ approach amidst a mixed economic landscape. Domestically, India’s growth remains resilient, and recent inflation figures have been benign, staying below the RBI’s target range. However, the global economic environment presents uncertainties, including volatile commodity prices and the monetary policy stances of major central banks, which could have spillover effects on our economy. “
“For the residential sector, a further cut would have been a welcome festive bonus for homebuyers. This stability ensures that borrowing costs remain manageable and avoids any sudden shocks to the market. The onus now squarely falls on the banks to enhance the transmission of previous rate cuts, ensuring that the benefits of lower interest rates are fully passed on to homebuyers.” He added.
Sanjay Malhotra said that the RBI is expanding the functionality in RBI Retail-Direct platform to enable retail investors to invest in treasury bills through systematic investment plans.
“To enable investors to systematically plan their investments, an auto-bidding facility for treasury bills (T-bills), covering both investment and reinvestment options, has been enabled in Retail Direct,” the governor said.
The new functionality will help investors to mandate automatic placement of bids in primary auctions of T-bills.
The Retail Direct portal was launched in November 2021 to facilitate retail investors to open their Gilt accounts with the Reserve Bank under the Retail Direct Scheme.
Mr. Anshuman Magazine, Chairman & CEO – India, South-East Asia, Middle East & Africa, CBRE, said, “The RBI’s decision to hold the repo rate reflects a measured approach amidst evolving macroeconomic conditions. With a cumulative 100 basis points cut since February 2025, the focus is now on improved credit flow and broader economic momentum. The announcement reflects ongoing demand recovery and a steady growth outlook, which reinforces market confidence for sectors including real estate, manufacturing, and infrastructure. For the real estate sector specifically, this signals stability and offers long-term predictability to developers and homebuyers. The upcoming festive season and range-bound inflation are expected to boost the market momentum further.“
