In its August 2025 monetary policy review, the Reserve Bank of India (RBI) has decided to maintain the repo rate at 5.5%, signalling a continued wait-and-watch approach amid evolving macroeconomic conditions.
RBI Governor Sanjay Malhotra announced that the Monetary Policy Committee (MPC) voted unanimously to retain the rate, citing incomplete transmission of the earlier 100 basis points cut.
“The impact of the rate cut since February is still unfolding,” Malhotra stated, adding that the current economic uncertainties warrant a pause to assess further transmission into credit markets and the broader economy.
While the unchanged rate may disappoint borrowers hoping for immediate EMI relief, experts suggest that the cumulative 1% cut earlier this year is likely to ease loan burdens in the coming months. The RBI emphasised its coordinated use of monetary tools to accelerate policy transmission during this easing cycle.
The decision comes against the backdrop of global economic tensions, including trade pressures from the United States, which may further influence India’s monetary stance in the near future.
