RBI Repo Rate Unchanged at 5.25% : What It Means for Borrowers

The Reserve Bank of India (RBI) has kept the repo rate unchanged at 5.25% following the Monetary Policy Committee (MPC) meeting held from 3-5 June 2026. The six-member committee also retained its neutral stance, signaling a cautious approach amid rising global uncertainty, elevated energy prices, and inflation concerns.

For borrowers, the decision means there is unlikely to be any immediate change in lending rates linked to the repo rate. Home loan borrowers, particularly those with floating-rate loans, can expect their EMIs to remain stable in the near term. The standing deposit facility (SDF) rate and marginal standing facility (MSF) rate were also left unchanged at 5% and 5.5%, respectively.

Explaining the decision, RBI Governor Sanjay Malhotra said the MPC chose to wait for greater clarity on inflation and growth risks before making any policy adjustments. Despite inflation remaining under control, higher oil prices, rising costs, and supply disruptions remain key risks.

What can borrowers expect?

The rate pause comes at a time when credit growth remains strong. According to the RBI, overall credit from all sources grew 15.4% year-on-year, while bank credit expanded by more than 16%. “The Reserve Bank, going forward, would continue to ensure appropriate liquidity in the banking system to meet the productive requirements of the economy and facilitate further monetary policy transmission,” Malhotra highlights. Healthy credit growth and adequate liquidity in the banking system are expected to support the continued availability of loans across segments, including housing, vehicle loan, education loan, and personal loans.

Amit Prakash, Co-founder and CBO, Urban Money, comments, “For the housing finance ecosystem, this is a positive signal as home loan interest rates are expected to remain stable, helping sustain buyer confidence, particularly in the affordable and mid-income housing segments. We believe the long-term demand fundamentals for housing remain strong, and a stable interest rate environment will continue to support homeownership aspirations across the country.”

However, borrowers hoping for lower interest rates may have to wait longer. The RBI has revised its inflation forecast for the current financial year to 5.1% from 4.6% earlier, while lowering its GDP growth projection to 6.6% from 6.9%. The central bank also emphasized that it will remain data-dependent and closely monitor incoming economic indicators.