RBI MPC holds repo rate at 5.25% in unanimous August 2026 vote
The RBI's Monetary Policy Committee held the repo rate at 5.25% in a unanimous 6-0 vote on 5 August 2026 and kept its neutral stance. Here is the worked EMI and FD arithmetic.
The Announcement
The Reserve Bank of India's Monetary Policy Committee (MPC) held the policy repo rate at 5.25% at the conclusion of its meeting on 3 to 5 August 2026, keeping borrowing costs where they have stood since December 2025. The decision was unanimous, with all six members voting to keep the rate unchanged, per the resolution dated 5 August 2026 (press release 2026-2027/809).
The committee also retained the neutral policy stance it has run since June 2025. With the repo rate steady, the Standing Deposit Facility (SDF) rate stays at 5.00% and the Marginal Standing Facility (MSF) rate and the Bank Rate stay at 5.50%. The resolution left the rate corridor and the operative framework in place, so no new effective date attaches to the rate itself - the existing 5.25% simply continues.
Why It Changed
Nothing changed in the headline number, and the MPC framed the pause around price and growth data. The resolution notes that headline inflation "edged up above the target, as expected", while growth "continues to be supported by resilient domestic demand". On balance, the committee judged that "there is a need for greater clarity to emerge" before taking any policy action.
Per the statement, the MPC projected CPI inflation at 5.0% for 2026-27, with the print easing to 4.7% in the second quarter before rising to 5.9% in the third and 5.5% in the fourth; core inflation was pegged at 4.3%. Real GDP growth was projected at 6.7% for the year, with quarterly readings between 6.4% and 7.0%. These are the RBI's own figures as cited in the resolution, not Oquilia's estimates.
Impact on Borrowers
For borrowers, a hold means the reference rate that anchors most floating-rate home loans does not move on this decision. Since October 2019 the RBI has required banks to price retail floating loans off an external benchmark, and for the large majority that benchmark is the repo rate. With the repo unchanged at 5.25%, the External Benchmark Lending Rate (EBLR) on those loans has no reason to reset up or down at the next reset date on account of policy - the equated monthly instalment (EMI) simply holds.
Illustration: on a Rs 50 lakh, 20-year (n = 240 months) floating-rate home loan at a prevailing 8.10%, the EMI works out to about Rs 42,134 using EMI = P x r x (1+r)^n / ((1+r)^n - 1), where P is the principal and r the monthly rate (annual / 12). Because the repo held, that figure does not change from this meeting. Over the full term the same loan pays roughly Rs 51.1 lakh in interest, so even small rate moves matter.
The mechanics are worth stating plainly. Each 25 basis points (0.25 percentage points) of repo movement, once transmitted, shifts this EMI by roughly Rs 780 a month - the EMI would be about Rs 42,918 at 8.35% and about Rs 41,356 at 7.85%, on the same principal and tenure. EBLR-linked loans reprice on their individual reset dates; loans still priced off the older MCLR framework move with a lag. Borrowers on MCLR can ask their bank about switching to an external benchmark; banks may charge a fee. Run your own figures on 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 a rate the RBI sets, so a repo hold does not directly change what a fixed deposit pays. In practice, with the repo steady, banks have little fresh reason to reprice deposits on this decision, though individual banks revise their FD cards for their own funding reasons at any time.
To see what is at stake on a deposit, take Rs 1 lakh in a one-year bank FD compounding quarterly. At 6.50% it grows to about Rs 1,06,660, an interest of roughly Rs 6,660; at 7.00% it grows to about Rs 1,07,186, or about Rs 7,186. Over five years at 6.50% the same Rs 1 lakh reaches about Rs 1,38,042. Small-savings schemes such as PPF, NSC and SCSS are set separately by the Finance Ministry each quarter and are unaffected by this MPC resolution. Check tenor-by-tenor outcomes on the FD calculator.
What Happens Next
The 5.25% repo rate and the neutral stance continue from here; there is no scheduled change attached to this resolution. Transmission of past decisions keeps working through the system - EBLR-linked loans reset on their own dates and deposit rates follow each bank's commercial calls. The RBI has scheduled the next MPC meeting for 5 to 7 October 2026, when the committee reviews the same inflation and growth data before its next resolution. A published calendar date is a fact; what the committee decides on it is not, and this report makes no prediction about it.
FAQ
What exactly did the RBI announce?
The MPC held the policy repo rate at 5.25% on 5 August 2026, in a unanimous 6-0 vote, and retained the neutral stance. The SDF stays at 5.00% and the MSF and Bank Rate at 5.50%, per the resolution.
When does the new rate take effect?
There is no new rate. The repo has stood at 5.25% since December 2025 and simply continues, so no fresh effective date applies to it.
How does this reach my EMI?
Most floating home loans are priced off the repo through the EBLR. With the repo unchanged, the benchmark has no policy reason to move, so the EMI on a Rs 50 lakh, 20-year loan holds near Rs 42,134 at 8.10%. See the home loan EMI calculator.
Does this change existing FDs or PPF balances?
No. Existing FDs keep their contracted rate to maturity, and PPF and other small-savings rates are set by the Finance Ministry each quarter, separately from this MPC decision.
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.
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.