In the backdrop of trade tariffs war triggered by the US President Donald Trump and the moderation in headline inflation, the RBI’s Monetary Policy Committee (MPC) has announced that the repo rate will maintain status quo at 5.5%. “All six members of the MPC vote unanimously in favour of maintaining the repo rate at 5.5% under the Liquidity Adjustment Facility,” said Sanjay Malhotra, RBI Governor. The announcement came after the MPC August policy meeting was held from August 4 to 6, 2025.
This was an expected move that would aid policy makers to assess the effect of the recent rate cuts made. According to Malhotra, even as there is uncertainty about the tariff situation, the neutral policy stance will continue. Interest and welfare of Indian citizens remain foremost, the RBI Governor highlighted.
As per the August policy, the Bank Rate and the Marginal Standing Facility (MSF) are unchanged at 5.75%. The Standing Deposit Facility (SDF) stands at 5.25%. The GDP growth projection for FY26 is expected to be around 6.5%.
The repo rate is the interest charged by the RBI to banks and financial institutions for short-term loans in India. A lower repo rate fosters economic growth, while a higher repo rate can slow it down.
What does the unchanged repo rate mean for the real estate segment?
The unchanged repo rate is expected to provide continued relief to the real estate segment.
Praveen Sharma, CEO, REA India (Housing.com)
The RBI’s decision to maintain the repo rate at 5.5% reflects a balanced and prudent stance, coupled with positive guidance on inflation and GDP. This pause allows time for the full transmission of the 100 basis point rate cut implemented since February 2025. As monetary easing continues to flow through the system, it is expected to bolster housing affordability—especially amid a sustained rise in average costs over the past 18 months—and support buyer sentiment during the upcoming festive season. Policy stability also reinforces confidence among homebuyers and developers alike, underpinning steady growth in the residential real estate sector amid ongoing urbanisation and evolving consumer aspirations.
Pramod Kathuria, founder & CEO, Easiloan
The RBI’s decision to hold the repo rate at 5.5% with a neutral stance is an indication of a stable and accommodative monetary ecosystem. This stability ensures that the recent 100 bps rate cut can permeate deeper in the credit markets to the advantage of both lenders and borrowers. For the housing loan market, a stable interest rate scenario ensures risk-free choice for homebuyers and consistent growth for the housing market. We view this as a positive development that will further drive momentum in real estate and home finance at Easiloan.
Chintan Sheth, chairman and managing director, Sheth Realty
The RBI’s repo rate cut comes as a timely move for Mumbai’s real estate industry unlocking rapid relief for homebuyers through reduced EMIs and encouraging investment sentiment amongst them. The strategic action not only uplifts affordability but also accelerates project execution and redevelopment momentum across the city. We witness this as an opportunity to fast track consciously designed homes that sync in with the evolving lifestyle aspirations, additionally contributing to Mumbai’s urban transformation and making aspirational living more attainable for a wider segment of buyers.
Dharmendra Raichura, VP and head of finance, Ashar Group
The RBI’s decision to hold the repo rate at 5.5% signals a sensible, growth-focused stance in the face of easing inflation and an uncertain global outlook. Following the recent 25% tariff imposed by US President Trump, which has added pressure to the economic cycle, maintaining rate stability provides much-needed reassurance especially for interest-sensitive sectors like real estate. For homebuyers, unchanged rates ensure continued affordability of home loans and support plans to upgrade to larger, future-ready homes. This steady policy direction is set to further strengthen the growth witnessed in dynamic markets such as MMR and Thane over recent quarters. We believe that a stable monetary environment, combined with rising incomes and sustained infrastructure development, will keep housing demand healthy through FY25, as buyers increasingly seek reliable developers, superior construction quality, and long-term value from their real estate investments.
Shishir Baijal, chairman and managing director, Knight Frank India
The RBI’s decision to hold rates steady underscores its calibrated approach amidst a complex economic backdrop. While inflation has moderated, it remains uneven and the central bank is understandably cautious given the persistent risks from global commodity prices, geopolitical tensions and volatile capital flows.
For the real estate sector, the continuation of stable policy rates and surplus liquidity conditions provide much-needed predictability and help preserve affordability for homebuyers. Notably, some banks have already reduced consumer home loan rates – a move that supports housing demand, especially in the mid-income and low-income segment – and more transmission in interest rates is underway. This policy continuity, coupled with easing credit conditions and steady economic growth can provide a boost to the affordable housing categories.
Housing.com POV
The RBI after cutting basis points between February and June 2025, opted for the wait and watch approach in August and left the repo rate unchanged at 5.5%. With the home lending rates below 8.5% and repo rate unchanged, the home buyers don’t have to worry about an increase in EMI in the near future and have sufficient time to plan out their finances. While this decision was expected, a further cut in repo rate would have lowered the home loan rates even more. This would have got in more first time home-buyers and fence sitters to invest in the segment and the festive season would have just added to the decision making process.
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