Reserve Bank of India
RBI Monetary Policy: There is relief news for the common man. If you were worried about the burden of home loan or car loan EMI, then you can take a sigh of relief now. The Reserve Bank of India (RBI) has made it clear that there will be no change in interest rates right now. In the meeting of the Monetary Policy Committee (MPC) that ended on February 6, it was decided to keep the repo rate stable at 5.25 percent. This decision is a relief to all those loan holders who were hoping that at least their monthly installments will not increase.
What is repo rate?
The first MPC meeting of this year started on 4 February, the results of which have come out today. The central bank has maintained the repo rate at 5.25%. Earlier in December 2025, the general public had received great news, when the repo rate was reduced by 0.25 percent. After that cut, the repo rate came down to 5.25% and currently it remains at the same level.
If understood in simple words, repo rate is the rate at which banks of the country take loans from RBI for their needs. When banks get cheap loans from RBI, they pass this benefit to their customers by reducing interest rates. Since the rates are stable this time, it simply means that banks are less likely to make any major changes in the interest rates of your loan immediately. This step is considered important to maintain stability in the market.
10 years report card, when has your pocket been tightened?
If we look at the data of the last decade, the graph of interest rates has been quite fluctuating. It is interesting to know where we started from and where we stand today. In the year 2015, the repo rate was at a high level of 7.50%, which was a very expensive period for the borrowers. After this it gradually declined.
During the Covid pandemic, i.e. in 2020 and 2021, the repo rate was brought down to a historically low level of 4.00% to support the economy. However, to control inflation, the rates started increasing again from 2022. It had reached 6.50% in 2023-24. But now, at the beginning of 2026, we are at the level of 5.25%, which indicates that the situation is now coming under control and interest rates have come down from their peak.
History of repo rate from 2015 to 2025
| Year | Repo Rate (%) |
| December 2025 | 5.25 |
| October 2025 | 5.5 |
| August 2025 | 5.5 |
| June 2025 | 5.5 |
| April 2025 | 6.00 |
| February 2025 | 6.25 |
| December 2024 | 6.50 |
| 2023-24 | 6.50 |
| 2022 | 6.25 |
| 2021 | 4.00 |
| 2020 | 4.00 |
| 2019 | 5.15 |
| 2018 | 6.25 |
| 2017 | 6.25 |
| 2016 | 6.50 |
| 2015 | 7.50 |
Indian economy is very ‘combative’
RBI Governor Sanjay Malhotra has shown a very positive attitude towards the economy. He said in clear words that the Indian economy remains very ‘resilient’. On the domestic front, the atmosphere regarding inflation and growth is quite positive.
However, an important change has been made regarding GDP figures. RBI has currently postponed its full year GDP estimate for the financial year 2027. Governor Malhotra informed that when the new series of GDP is released, accurate estimates will be given in the monetary policy of April only on that basis. This means that the real picture will become clear in April.
At the same time, the growth rate estimate for the near-term future has been increased. Real GDP growth forecast for the first quarter (Q1) has been increased to 6.9% and for the second quarter (Q2) to 7.0%.