RBI Holds Repo Rate At 5.25%: Loans Won’t Get Costlier As MPC Maintains Status Quo

The decision comes after a year of four gradual rate cuts totalling 1.25% in 2025, allowing the RBI to pause and assess emerging financial pressures.

Top Summary

What happened: The Reserve Bank of India kept the repo rate at 5.25%, with no changes announced during the February MPC meeting.

Why it matters now: Borrowers will see no increase in loan costs and existing EMIs will remain unchanged.

What changes for people: Home loan, car loan, and personal loan rates stay stable; banks will maintain current lending and deposit rates.

Who is affected: Retail borrowers, banks, NBFCs, real estate buyers, and businesses dependent on loan-linked capital.

The RBI delivered a status quo policy, choosing to hold the benchmark rate as the economy digests last year’s easing cycle. Governor Sanjay Malhotra outlined the MPC’s assessment amid mixed global signals, steady core inflation and improving domestic demand.

Why RBI held the rate

Key reasons behind the unchanged stance include:

Controlled inflation trajectory

Need to observe effects of earlier cuts

Global financial volatility

Stable but cautious growth outlook

The central bank emphasised macroeconomic stability, noting that premature rate cuts could risk fresh price pressures.

What this means for borrowers

The decision ensures:

No rise in EMIs for home, personal and vehicle loans

Better planning for new borrowers entering real estate markets

Stable borrowing costs for MSMEs and retail consumers

Continued momentum in housing and auto sectors

Banks are expected to keep lending rates steady until the next policy review.

A look back: Four cuts in 2025

In 2025, the RBI had reduced rates four times, totalling 1.25%, giving relief to credit-sensitive sectors.

With the repo now at 5.25%, the RBI has adopted a wait-and-watch stance to ensure inflation remains anchored.

Market and economic implications

Analysts expect:

Bond markets to remain range-bound

Moderate credit growth

Stabilisation in real estate pipelines

Continued focus on liquidity management

Experts also say the RBI prefers policy flexibility as global central banks prepare for a mixed 2026.