RBI MPC Meet Highlights: Central bank keeps repo rate unchanged at 5.25%

"RBI’s decision to maintain status quo on policy rates provides much-needed stability and clarity for the real estate sector. For commercial real estate, steady interest rates and borrowing costs support sustained leasing momentum and long-term investment decisions, thereby increasing demand for office space and support new developments. Easier credit availability attracts both individual and institutional investors, driving new investments into commercial real estate. However, a rate cut is expected soon to have a pronounced impact on the real estate sector easing borrowing costs and improving credit availability, leading to consumer demand to pick up significantly," said Manas Mehrotra, Founder, 315Work Avenue, a leading coworking player.

“RBI delivered a Status Quo policy by keeping policy rates on hold. The stance is kept at Neutral. Only one member, now, retained the view of changing the monetary policy stance from Neutral to Accommodative. FY26 CPI Inflation outlook has been retained at similar levels as last policy at 2.1%, while 1H27 inflation has been revised marginally higher to 4.1% due to increase in prices of precious metal. GDP Forecast for 1H27 has also been revised upwards to 7% from 6.8% earlier, aided by recent comprehensive trade pact with the EU, trade deal with The US etc. While RBI did not announce any explicit policy measure for liquidity, RBI re-emphasized keeping ample liquidity to support economic activity. We expect RBI will continue to conduct Liquidity operations in a way that will keep overnight rate closer to the policy rate. The upward revision of Inflation and GDP Growth forecast gives hawkish tilt to the policy and indicates monetary policy easing is largely behind us. We expect 10-yr G-sec to trade in 6.60% - 6.80% range in near term. Short-term yields are likely to remain in higher range with 1-year CDs trading in 6.85%-7.25% levels on account of significant pick-up of bank credit growth in Q4,” said Amit Somani, Deputy Head - Fixed Income, Tata Asset Management.

"RBI’s decision to hold rates signals a preference to watch inflation, liquidity, and transmission before moving further. Most of the easing done so far has already flowed into retail lending, which is why home loan rates remain relatively competitive despite the pause. Affordability continues to be supported by stable spreads, lender competition, and selective concessions. Borrowers can still optimise costs by keeping EMIs higher to shorten loan tenures and reduce interest outgo, while balance transfers remain relevant for incremental savings. On the savings side, a steady repo rate means fixed deposit rates are likely to stabilise, with fewer sharp hikes ahead. Higher FD rates are becoming more selective, and most mainstream offers are settling into a narrower band. Investors looking to lock in current yields may consider spreading deposits across tenures, while senior citizen rates continue to offer a small but meaningful edge," said Adhil Shetty, CEO, BankBazaar.

“The RBI's decision to keep the repo rate unchanged at 5.25 per cent is a welcome step. Domestic economic activity remains robust, and the growth outlook is positive. Maintaining stable interest rates at this time will encourage homebuyers to make purchasing decisions. It will also motivate developers to launch new projects to meet customer demand. At a time when the government has placed special emphasis on the development of cities with a population of 5 lakh and above in its Union Budget, stable interest rates can provide a significant boost to Tier 2 and Tier 3 cities. Overall, this decision supports stability and sustained growth for the real estate sector and the country's economy,” said Parveen Jain, President, NAREDCO.

“The RBI’s decision to keep the repo rate unchanged at 5.25% while maintaining a neutral stance brings much-needed stability to the real estate sector. At a time when the market is absorbing the impact of the Union Budget and evolving global trade dynamics, policy continuity helps sustain buyer confidence and allows developers to plan cash flows more efficiently. While an eventual rate cut would further support housing demand, especially in the mid-income and affordable segments, the current stance signals RBI’s focus on balancing growth with inflation control. Overall, this steady policy environment will aid gradual and sustainable growth across residential and commercial real estate,” said Umesh Rathore, VP – Sales & Marketing, VVIP Group.

"The policy statement has been broadly along expected lines, with the Central Bank having done the heavy lifting over the last few months on both policy rates and liquidity infusion. At the same time, the RBI is expected to remain proactive on liquidity requirements, based on anticipated liquidity flows. While this would imply the prevalence of surplus liquidity for a while, it is expected that there will be a much closer alignment of overnight rate settings with the policy rate," Rajeev Radhakrishnan, CFA, CIO – Fixed Income, SBI Mutual Fund.

The rupee declined to historic low and crossed 92 against a dollar last week making imports costlier, raising fears of rise in inflation. Rupee has depreciated by about 6 per cent in calendar year 2025.

"After the Reserve Bank of India’s cumulative 125 basis points of repo rate cuts over the past financial year, the Monetary Policy Committee has acted prudently to support growth while keeping overall inflation within the target band. With growth impulses supported by domestic policy measures and a stable domestic macroeconomic backdrop, the decision to hold rates at this stage reflects a balanced, data-driven approach that prioritises macro-stability while allowing earlier monetary easing to fully transmit through the system. Experts widely anticipated this measured pause, recognising the value of assessing incoming inflation and growth data before further action. As the focus now shifts toward liquidity management and improved transmission across lending rates, the current policy stance should help sustain momentum without overstimulating price pressures. Overall, the RBI’s approach reinforces confidence in India’s growth outlook while preserving policy flexibility to respond to evolving global and domestic conditions," said Sarbvir Singh, Joint Group CEO, PB Fintech.

“The RBI’s decision to maintain the repo rate provides much-needed stability to the housing market at a time when buyer sentiment is steadily strengthening. While an immediate rate cut would have further boosted affordability, the pause ensures that home loan EMIs remain predictable and borrowing costs stay supportive. This stable interest-rate environment, combined with improving infrastructure and sustained end-user demand, is positive for residential real estate. We believe this will encourage fence-sitters to move ahead with purchase decisions, especially in the mid-income and premium housing segments, and help developers plan long-term projects with greater confidence,” said Neeraj K Mishra, Executive Director, Ganga Realty.

"The RBI’s decision to maintain a status quo on policy rates is largely in line with expectations, especially after the cumulative rate cut of 125 basis points in 2025. The transmission of these cuts is still playing out, with several banks yet to fully pass on the benefit to borrowers. A cumulative reduction of 125 basis points over a 20-year loan tenure translates into an EMI reduction of approximately ₹80 per lakh per month, significantly improving affordability and enhancing borrowing capacity for big-ticket purchases such as homes. For existing home loan borrowers currently servicing loans at interest rates above 8%, this presents a timely opportunity to negotiate better terms with their lenders or explore balance transfer options, as many banks are now offering home loans at interest rates close to 7.5% to new borrowers," said Raoul Kapoor, Co CEO, Andromeda Sales and Distribution.

RBI Governor Sanjay Malhotra said that forex reserves are very healthy at USD 723.8 billion at the end of January. He also said that the current account deficit is expected to remain 'moderate' in the current fiscal year.

"The decision to maintain status quo will keep the ongoing residential real estate sales momentum on course, offering homebuyers assurance of steady loan terms. The Indian real estate sector has demonstrated exceptional resilience and momentum, driven by robust demand, rising aspirations, and supportive government-led initiatives, positioning it as one of the most dynamic and fastest-growing markets globally. As India's economy continues to grow, there is an increasing interest among the homebuyers to continue to invest in residential real estate for long-term returns. We are hopeful that the real estate sector’s growth momentum will continue to accelerate further and drive long term momentum for home ownership and contributing positively to overall economic expansion. A supportive interest-rate environment plays a crucial role in sustaining homebuyer confidence and hence, we would definitely welcome further rate cuts in the near term, thereby boosting affordability and further investments in the sector," said Ramani Sastri, Chairman and MD, Sterling Developers.

The Reserve Bank of India has deferred its 2026-27 GDP and CPI inflation projections ahead of the release of the new national accounts and price series this month. Governor Sanjay Malhotra said the central bank will incorporate the revised data framework before offering medium-term assessments. The 2026-27 GDP and CPI estimates will now be announced with the April bi-monthly monetary policy review.  

The Reserve Bank of India has projected 7.4 per cent growth in the Gross Domestic Product (GDP) for FY26. The central bank has hiked growth forecast for Q1FY27 and Q2FY27 by 20 bps to 6.9 per cent and 7 per cent.

RBI Governor Sanjay Malhotra said the economic activity is expected to hold up well in the next year, and India’s economy is in a good spot even as global uncertainties remain elevated.

RBI Governor Sanjay Malhotra announced that the Monetary Policy Committee (MPC) has decided to keep to repo rate unchanged at 5.25 per cent. 

Indian equity markets opened in the red and on a cautious note, extending the ongoing consolidation phase as mixed global cues and the RBI Monetary Policy Committee (MPC) decision expected shortly kept investors firmly in a wait-and-watch mode.

The government has tasked the Reserve Bank to ensure consumer price index (CPI)-based retail inflation remains at 4 per cent with a margin of 2 per cent on either side.

Along with the RBI Governor, the other members of the MPC are Nagesh Kumar, Director and Chief Executive, Institute for Studies in Industrial Development, New Delhi; Saugata Bhattacharya, Economist, Mumbai; Ram Singh, Director, Delhi School of Economics; Poonam Gupta, RBI Deputy Governor; and Indranil Bhattacharyya, RBI Executive Director.

The Reserve Bank of India (RBI) has already reduced the key short-term lending rate (repo) by 125 basis points since last February. The central bank on December 5, 2025, said that the MPC voted unanimously to reduce the policy repo rate by 25 basis points to 5.25 per cent.

The Reserve Bank of India's Governor, Sanjay Malhotra, will announce the monetary policy decision today, 6 February 2026, Friday. The announcement will be shared at around 10 am.