RBI Repo Rate: Will Your EMI Fall or Rise?

Mumbai: The Reserve Bank of India (RBI) has announced the latest decision of its Monetary Policy Committee (MPC), with Governor Sanjay Malhotra outlining the key decisions taken during the meeting. The announcement comes amid continued global geopolitical uncertainty and ongoing concerns surrounding inflation, economic growth and interest rates.

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The MPC decision was announced at 10 AM, with the repo rate remaining a key focus for borrowers, banks, investors and the broader economy.

Third MPC Meeting of FY27

The latest meeting was the fourth MPC meeting of calendar year 2026 and the third meeting of financial year 2026-27 (FY27).

The meeting was closely watched by the banking sector, industries, investors and millions of home and vehicle loan borrowers, as any change in the repo rate can influence lending rates and monthly EMIs.

Repo Rate Remains Unchanged

The RBI has kept the repo rate unchanged at 5.25%. This marks the third consecutive MPC meeting in which the central bank has maintained the existing rate.

The last change in the repo rate was announced in December 2025, when the RBI reduced it from 5.50% to 5.25%.

With the latest decision, the repo rate continues to remain at 5.25%.

What Do Experts Say?

Economic experts had expected the RBI to maintain a data-driven approach, considering the prevailing global geopolitical tensions, inflationary pressures and developments in international financial markets.

Against this backdrop, the decision to keep the repo rate unchanged was largely in line with expectations.

What Exactly Is the Repo Rate?

The repo rate is the interest rate at which the Reserve Bank of India lends short-term funds to commercial banks.

When banks require funds for lending to customers or for managing their day-to-day financial requirements, they can borrow money from the RBI. The interest rate charged by the central bank on such borrowing is known as the repo rate.

The repo rate plays an important role in determining the interest rates offered by banks to customers.

How Does a Repo Rate Change Affect Your EMI?

The repo rate can have a significant impact on bank lending rates and, ultimately, the monthly financial burden on borrowers.

When the repo rate increases, borrowing money from the RBI becomes more expensive for banks. This can lead to higher interest rates on home loans, vehicle loans and personal loans. As a result, borrowers may have to pay higher EMIs.

On the other hand, when the repo rate decreases, banks can access funds at a lower interest rate. This may allow them to offer loans to customers at lower rates, potentially reducing EMIs on existing loans linked to applicable benchmarks or making new loans cheaper.

For borrowers, therefore, the RBI’s repo rate decision remains an important factor to watch when planning home loans, vehicle loans and other major financial commitments.

Translated Quotes / Main Points (As Is)

“RBI has kept the repo rate unchanged at 5.25%.”

“The last repo rate cut was announced in December 2025, when the rate was reduced from 5.50% to 5.25%.”

“The latest meeting was the fourth MPC meeting of 2026 and the third MPC meeting of FY27.”

“An increase in the repo rate can push up loan interest rates and EMIs.”

“A reduction in the repo rate can make borrowing cheaper and may reduce EMIs.”

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