RBI MPC holds repo rate at 5.25% in unanimous August vote

The Announcement

The Monetary Policy Committee (MPC) of the Reserve Bank of India kept the policy repo rate unchanged at 5.25%, per its resolution for the meeting held from 3 to 5 August 2026 (Press Release 63287), with the decision effective 5 August 2026. The standing deposit facility (SDF) rate stays at 5.00% and the marginal standing facility (MSF) rate and the Bank Rate at 5.50%. The committee also retained the "neutral" policy stance.

The vote was unanimous. Per the resolution, the MPC "voted unanimously to keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 5.25 per cent." All six members backed the hold. The operative fact for households is that the benchmark off which floating-rate loans are priced has not moved on this decision.

Why It Changed

The repo rate was left where it was, and the resolution set out the committee's reasoning. The MPC noted that while headline inflation is projected to increase, that rise is "primarily on account of supply side pressures caused by food and fuel" rather than broad demand-driven price growth. On the real economy, the resolution records that growth, though resilient, is "expected to be lower in 2026-27" than in the prior year.

The committee's own projections frame the decision. Per the resolution, CPI inflation for 2026-27 is projected at 5.0%, with Q2 at 4.7%, Q3 at 5.9% and Q4 at 5.5%. Real GDP growth for 2026-27 is projected at 6.7%, with Q1 at 7.0%, Q2 at 6.4%, Q3 at 6.5% and Q4 at 6.8%.

Impact on Borrowers

Because the repo rate is unchanged, the external benchmark lending rate (EBLR) that most new floating-rate home loans are priced against does not move on this decision. An EBLR-linked EMI stays at its current level until the loan's own reset date, and a hold means there is no repo-driven change to pass through.

Here is the arithmetic, as an illustration only. The EMI on a floating-rate loan follows EMI = P x r x (1+r)^n / ((1+r)^n - 1), where P is the principal, r the monthly rate (annual rate divided by 12) and n the tenure in months. On a Rs 50 lakh, 20-year loan (n = 240) at a prevailing 8.50% EBLR-linked rate, the EMI works out to about Rs 43,391 a month, of which roughly Rs 54.1 lakh is interest over the full term. With the repo held, that figure does not change on account of this meeting.

To show the sensitivity, and purely as arithmetic rather than any forecast: a hypothetical 25 bps (0.25 percentage points) move in the applicable rate would shift that same EMI by about Rs 788 to Rs 794 a month in either direction (to roughly Rs 42,603 at 8.25%, or about Rs 44,186 at 8.75%). Borrowers on the older MCLR system see repo changes only with a lag and on their reset dates; those on MCLR can ask their bank about switching to an external benchmark, and banks may levy a fee. Run your own principal and tenure through the home loan EMI calculator, or the personal loan EMI calculator for unsecured borrowing.

Impact on Savers

Deposit rates are each bank's commercial decision, not something the RBI sets directly. A repo hold removes any fresh repo-driven pressure on banks to reprice fixed deposits, but individual banks can still adjust their FD cards for their own funding reasons.

The saver arithmetic, again as an illustration: Rs 1 lakh placed in a fixed deposit that compounds quarterly at 6.50% grows to about Rs 1,06,660 after one year (roughly Rs 6,660 of interest) and to about Rs 1,38,042 over five years (about Rs 38,042 of interest). The compounding basis matters - bank FDs typically compound quarterly, which is the basis used here. On the same Rs 1 lakh over one year, a 25 bps difference in the headline FD rate is worth only about Rs 263, so tenure and compounding frequency usually move the outcome more than a small rate change. Check the numbers for your own amount and tenure with the FD calculator.

What Happens Next

The rate structure announced on 5 August 2026 is now in effect. Transmission from here is mechanical rather than immediate: EBLR-linked loans reprice on each borrower's individual reset date, MCLR-linked loans adjust with a lag, and deposit rates change only if and when a bank decides to move them. Since this was a hold, there is no repo change to transmit in the first place.

The MPC meets on a bi-monthly cycle, and the next scheduled review follows in the subsequent cycle per the RBI's published calendar. A meeting date is a calendar fact; what the committee decides on that date is not.

FAQ

What exactly did the RBI announce?

The MPC kept the policy repo rate unchanged at 5.25%, effective 5 August 2026, in a unanimous 6-0 vote, and retained the neutral stance. The SDF rate stays at 5.00% and the MSF rate and Bank Rate at 5.50%, per Press Release 63287 for the 3-5 August 2026 meeting.

When does the decision take effect?

The rates took effect on 5 August 2026, the date of the resolution. For a hold, that simply means the existing repo rate of 5.25% continues; there is no new number to phase in and no change of benchmark for banks to implement.

How does a repo decision reach my EMI?

Most new floating-rate home loans are linked to an external benchmark tied to the repo rate. When the repo moves, the EBLR resets on your loan's scheduled reset date; when it holds, as here, the EMI stays put. On a Rs 50 lakh, 20-year loan at 8.50%, that EMI is about Rs 43,391. Use the home loan EMI calculator for your figures.

Does this change my existing fixed deposits?

No. A running FD is contracted at a fixed rate for its tenure and is unaffected by an MPC decision. The repo hold also applies no fresh pressure on banks to change the rates offered on new deposits, though banks set those rates commercially and can still adjust them.

What did the MPC say about inflation and growth?

Per the resolution, CPI inflation for 2026-27 is projected at 5.0% and real GDP growth at 6.7%. The committee noted that the projected rise in headline inflation is primarily due to supply-side pressures from food and fuel, while growth is expected to be lower than in the prior year.

Where can I read the official release?

The full resolution is on the RBI website as Press Release 63287, dated 5 August 2026, alongside the Governor's Statement and the Statement on Developmental and Regulatory Policies from the same meeting.

This report is based on the official RBI Monetary Policy Committee resolution dated 5 August 2026. It was surfaced via coverage aggregated on Google News.