RBI Keeps Repo Rate Unchanged at 5.5%; Neutral Stance to Continue Says Sanjay Malhotra

The Monetary Policy Committee (MPC) on Tuesday, August 6, decided to keep the policy repo rate unchanged at 5.5%. Reserve Bank of India (RBI) Governor Sanjay Malhotra stated that the neutral stance would continue. In the past three MPC meets, the RBI has cut RR by 25 bps each and 50 bps. 

This time, the RBI said it will keep a “Neutral" stance on the repo rate. The repo rate (RR) is the interest rate at which the central bank lends money to commercial banks and financial institutions, while the cash reserve ratio (CRR) is the percentage of a bank’s total deposits that must be kept with the RBI as cash reserves.

The RBI maintained its GDP forecast for the financial year 2025-26 at 6.5%. "RBI retains GDP growth forecast for current fiscal year at 6.5 pc with risk evenly balanced; geopolitical tensions pose headwinds," said Governor Sanjay Malhotra. Above-normal monsoon and lower inflation continue to support economic activity."

VIDEO | Reserve Bank of India (RBI) Governor Sanjay Malhotra says, "Prospects of external demand, however, remain uncertain amidst ongoing tariff announcements and trade negotiations... The real GDP growth for this current fiscal year is projected at 6.5 per cent."#MPC#RBI… pic.twitter.com/FTGP3ivOP9

— Press Trust of India (@PTI_News) August 6, 2025

"Prospects of external demand, however, remain uncertain amidst ongoing tariff announcements and trade negotiations... The real GDP growth for this current fiscal year is projected at 6.5 per cent," he added further.

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Malhotra said, "Growth in industrial sector remained subdued and uneven and system liquidity has been in surplus." "The domestic growth is holding up and is broadly revolving around the lines of our assessment. Even though there were some high-frequency indicators that showed missed signals in May this year. Rural consumption remains resilient while urban consumption revives. Fixed investment supported by buoyant government capex continues to support economic activity," he added.

"The Monetary Policy Committee (MPC) met on August 4, 5 and 6 to deliberate and decide on the policy repo rate. After a detailed assessment of the evolving macroeconomic and financial developments and outlook, the MPC voted unanimously to keep the policy repo rate under the liquidity adjustment facility lap unchanged at 5.5 per cent," added Malhotra.

Reactions From Industrialists on RBI Repo Rate

“The RBI’s decision to maintain the repo rate at 5.5% reinforces economic stability which is valued by long-term investors. However, a rate cut ahead of the festive season could have provided a much-needed boost to homebuyer sentiment. Affordability continues to be a crucial trigger even in premium segments for those awaiting the right financial window to invest. A reduction in rates could have translated into improved affordability, pushing both first-time buyers and investors into action. In metropolitan markets, where ticket sizes are substantial, even a marginal cut can make luxury purchases more accessible and unlock significant demand,” said Mr. Sandeep Agarwal, Executive Director-Finance & Group CFO, Elan Group.

"The real estate sector is hopeful with the RBI’s August 2025 repo rate decision on keeping the rates unchanged at 5.50%. It will provide confidence in home loan EMIs, enhancing affordability for first - time buyers and fueling festive season demand. This would drive project launches and completions, aligning with heightened Diwali demand. Given a stable inflation and GDP, and a stable repo rate, consumer confidence remains positive with better clarity in the housing finance ecosystem, along with heightened festive buying, and sustained market growth," said Raghav Malhotra, Founder and Director of PRIME Developments.

Yashank Wason, Managing Director, Royal Green Realty said, "The Reserve Bank of India’s decision to keep the repo rate steady at 5.5%—following a cumulative cut of 100 basis points earlier this year—offers a strong signal of stability to the real estate sector. By ensuring predictable borrowing costs, this move bolsters consumer confidence, particularly among home loan borrowers who have already gained from earlier rate reductions. With retail inflation easing to a six-year low of 2.1% and GDP growth holding strong at 7.4%, the RBI’s pause reflects confidence in India’s economic fundamentals. This stable interest rate environment is expected to sustain property demand, creating favorable conditions for both buyers and developers."

“The RBI’s decision to keep the repo rate unchanged at 5.50% in its August 2025 meeting brings much - needed stability to the housing market. For aspiring homeowners, it means EMIs remain manageable, keeping homeownership within reach. For developers, it supports sustained buyer interest and project planning. At a time where families are making long - term financial decisions, this steady policy stance provides confidence and encourages continued momentum in residential demand," said Rahul Singla, Director, Mapsko Group.