RBI MPC holds repo rate at 5.25%, keeps neutral stance in Aug 2026
The RBI's Monetary Policy Committee held the repo rate at 5.25% on 5 August 2026, voting unanimously and retaining a neutral stance. What it means for EMIs and FDs.
The Announcement
The Reserve Bank of India's Monetary Policy Committee (MPC) left the policy repo rate unchanged at 5.25% at the end of its August 3 to 5, 2026 meeting, per the resolution released on 5 August 2026 (Press Release 2026-2027/809). All six members voted unanimously to keep the rate steady, and the decision took effect immediately.
The related policy rates were also held: the Standing Deposit Facility (SDF) rate stays at 5.00%, and the Marginal Standing Facility (MSF) rate and the Bank Rate remain at 5.50%. The committee retained its neutral stance, unchanged from the previous meeting. The reference rate the central bank sets for the banking system does not move as a result of this meeting, as reported by The Hindu BusinessLine.
Why It Changed
The rate was held rather than adjusted. The MPC said it chose to keep the repo rate steady because, "even though headline inflation is projected to increase, it is primarily on account of supply side pressures caused by food and fuel; it is not getting broad-based; core inflation remains moderate", per the resolution. The committee added that it wanted "greater clarity to emerge, especially regarding inflation, its path and composition" before taking any policy action.
On the numbers the resolution cites, the RBI projected CPI inflation of 5.0% for 2026-27, peaking at 5.9% in the third quarter before easing to 5.5% in the fourth quarter and 5.3% in the first quarter of 2027-28. Real GDP growth was projected at 6.7%. The resolution described growth as "resilient" and core inflation as "benign", while flagging "uncertainties regarding south-west monsoon, El Nino, geopolitical and global trade policy". On the stance, the MPC said it "decided to retain the neutral stance to respond appropriately to macroeconomic developments".
Impact on Borrowers
Because the repo rate is unchanged, equated monthly instalments (EMIs) on repo-linked floating-rate loans do not move as a result of this meeting. Most home loans sanctioned since October 2019 are tied to an external benchmark, usually the repo rate, under the External Benchmark Lending Rate (EBLR) framework. These loans reprice on their scheduled reset dates, and with no repo change there is nothing to pass through. Loans on the older Marginal Cost of Funds based Lending Rate (MCLR) move with a lag and are likewise unaffected by a hold.
Consider a worked illustration. On a Rs 50 lakh, 20-year (240-month) floating-rate home loan at a prevailing 8.50%, the EMI works out to about Rs 43,391, using EMI = P x r x (1+r)^n / ((1+r)^n - 1), where P is the principal, r the monthly rate and n the tenure in months. That figure is unchanged by this decision.
For sensitivity, had the applicable rate been 25 bps (0.25 percentage points) lower at 8.25%, the same EMI would be about Rs 42,603, a difference of roughly Rs 788 a month. At 25 bps higher, 8.75%, it would be about Rs 44,186, roughly Rs 794 more. These are illustrations at an assumed base rate, rounded to the nearest rupee, not the rate on any specific loan. Run your own principal, rate and tenure through the home loan EMI calculator, or, for unsecured borrowing, the personal loan EMI calculator. Borrowers on MCLR can ask their bank about switching to an EBLR benchmark; banks may levy a conversion fee.
Impact on Savers
For depositors, a repo hold means the central bank has not changed the reference rate that indirectly influences deposit pricing. Bank fixed-deposit (FD) rates are each bank's own commercial decision, so they may still move up or down independently.
As an illustration of what deposits pay, Rs 1 lakh placed in a five-year FD at 6.50%, compounded quarterly, grows to about Rs 1,38,042, an interest gain of roughly Rs 38,042. At 7.00% on the same terms it would grow to about Rs 1,41,478, or about Rs 41,478 of interest, a difference of about Rs 3,436 over five years on Rs 1 lakh. Small gaps in the headline rate compound meaningfully over long tenures. Check your own amount and tenure with the FD calculator. Small-savings instruments such as PPF, NSC and SCSS are set separately by the government each quarter and are not affected by this MPC decision.
What Happens Next
The unchanged rates apply from 5 August 2026. With no repo change, there is no fresh transmission for banks to pass on from this meeting; existing EBLR loans continue to reprice on their contractual reset dates against the same benchmark.
The RBI said the next meeting of the MPC is scheduled for October 5 to 7, 2026, when the committee next reviews the policy rate and stance. The published inflation and growth projections run through the first quarter of 2027-28, but any decision taken at the October meeting depends on the data available then.
FAQ
What exactly did the RBI announce?
The MPC kept the repo rate unchanged at 5.25% and retained its neutral stance, per the resolution dated 5 August 2026. The SDF stays at 5.00% and the MSF rate and Bank Rate at 5.50%. All six members voted unanimously for the decision, which took effect the same day.
When does the decision take effect?
Immediately. The rates in the resolution apply from 5 August 2026. Because none of them changed, there is no new adjustment for banks to implement from this meeting, and existing loan and deposit contracts carry on as before.
How does an unchanged repo rate reach my EMI?
It does not move it. Repo-linked EBLR loans reprice on scheduled reset dates against the benchmark, and with no repo change there is nothing to pass through; MCLR loans move with a lag and are similarly unaffected. Use the home loan EMI calculator to model your own instalment.
Does this change my existing FD or PPF balance?
No. Existing FDs keep their contracted rate to maturity, and bank FD pricing on new deposits is each bank's own decision. PPF and other small-savings rates are set by the government quarterly, separately from the MPC.
What are the RBI's inflation and growth projections?
The resolution projected CPI inflation at 5.0% and real GDP growth at 6.7% for 2026-27, with inflation seen peaking at 5.9% in the third quarter before easing to 5.5% in the fourth quarter.
Where can I read the official release?
The full resolution is published on the RBI website as Press Release 2026-2027/809, dated 5 August 2026, linked in the source note below.
This report is based on the official RBI Monetary Policy Committee resolution dated 5 August 2026. It was surfaced via coverage in The Hindu BusinessLine.