RBI Holds Repo Rate at 5.25% as Policy Turns Stable
After a year of aggressive cuts, the central bank is holding steady to watch inflation before the August MPC meeting.
The Reserve Bank of India (RBI) has kept the benchmark repo rate unchanged at 5.25 per cent as of mid-2026, holding steady after a deliberate easing cycle through 2025 that lowered borrowing costs to support growth as domestic inflation cooled.
The repo rate is the interest at which the RBI lends to commercial banks; it anchors the cost of credit across the economy, from home loans to corporate borrowing.
Key Highlights
- Repo rate steady at 5.25% as of July 2026.
- Rate was cut through 2025 from 6.50% to 5.25% by December.
- Next Monetary Policy Committee meeting: 4-6 August 2026.
- Standing Deposit Facility at 5.00%; Marginal Standing Facility at 5.50%.
- Inflation target remains 4%, within a 2-6% band.
Background
The RBI navigated a complex 2025, balancing global commodity-price volatility against the need to support domestic consumption. It cut the repo rate from 6.50 per cent in early 2025 to 5.25 per cent by December 2025.
Rate decisions are set by the six-member Monetary Policy Committee (MPC), which by law targets consumer-price inflation of 4 per cent within a tolerance band of 2 to 6 per cent.
The rate corridor at a glance
| Rate | Level |
|---|---|
| Repo rate | 5.25% |
| Standing Deposit Facility (SDF) | 5.00% |
| Marginal Standing Facility (MSF) | 5.50% |
| Inflation target | 4% (2-6% band) |
| Next MPC meeting | 4-6 August 2026 |
Current Situation
Through the first half of 2026 the MPC held the rate at 5.25 per cent, adopting a wait-and-watch approach. The RBI Governor stressed the need to ensure inflation aligns durably with the 4 per cent target before any further accommodation.
Global factors, particularly crude-oil prices and the US Federal Reserve's decisions, continue to shape the cautious stance. Domestically, rural demand has revived on a favourable monsoon forecast, offsetting some risk of a consumption slowdown.
Why It Matters
For homebuyers, a stable 5.25 per cent repo rate keeps equated monthly instalments on home and auto loans manageable versus the peaks of 2024. For companies, a predictable cost of capital supports capital-expenditure planning — a backdrop that also shapes India's venture funding climate and large infrastructure investment.
“The decision to pause at 5.25 per cent is a prudent pivot from aggressive easing to vigilant stability,” observed the chief economist at a leading private-sector bank.
Frequently Asked Questions
What is the current RBI repo rate?
As of July 2026, the benchmark repo rate is 5.25 per cent.
When did the RBI last change the rate?
On 5 December 2025, when it cut the repo rate by 25 basis points from 5.50% to 5.25%.
When is the next MPC meeting?
The Monetary Policy Committee meets next from 4 to 6 August 2026.
How does the rate affect home loans?
A lower, stable repo rate keeps home-loan interest rates and EMIs more affordable, supporting real estate.
What is the SDF rate?
The Standing Deposit Facility, the floor of the liquidity corridor, is at 5.00 per cent.
Sources
- Reserve Bank of India — Monetary Policy statements
- RBI Monetary Policy Committee resolutions