The Reserve Bank of India has maintained the repo rate at 5.25% in its monetary policy decision announced on Wednesday, April 8, 2026, following a meeting of the Monetary Policy Committee from April 6-8. As reported by ABP Live, this unanimous decision by the MPC led by Governor Sanjay Malhotra was largely in line with market expectations, signaling a cautious approach amid global uncertainties. Following the RBI announcement, the stock market responded positively with the Sensex surging over 2,900 points and the Nifty opening above 23,950. Most sectoral indices, led by realty, banks, metal, auto, PSU banks and the financial services, were trading in the green.
The Reserve Bank of India has implemented a 125 basis points reduction in the repo rate over the past year, bringing it down from 6.50% in February 2025 to 5.25% by December 2025. According to reports from Upstox, the rate cuts were implemented in phases with the first reduction of 25 basis points in February 2025, followed by another 25 basis points reduction in April, bringing the rate down to 6.00%. The central bank then took a more aggressive approach in June with a 50 basis points cut to 5.50%, before maintaining the rate unchanged in August and October reviews. With the latest policy decision, the Standing Deposit Facility (SDF) rate remains at 5%, while the Marginal Standing Facility (MSF) and bank rate continue at 5.5%.
In the latest policy review, RBI Governor Sanjay Malhotra announced that the policy stance has been maintained at Neutral in a wait-and-watch approach. As reported by ABP Live, the MPC also retained its 'neutral' stance, indicating that future policy moves will depend on incoming data, particularly inflation trends and global developments. The RBI has raised India's GDP growth forecast for FY2025/26 to 7.6%, up from its earlier estimate of 7.4%, while GDP growth for FY2026/27 is estimated at 6.9%. The central bank has set the Cash Reserve Ratio (CRR) at 3%, Savings Deposit Facility (SDF) rate at 5.00%, Marginal Standing Facility (MSF) rate at 5.50%, and Bank Rate at 5.50%. System liquidity stood at an average daily surplus of ₹2.3 lakh crore.
For home loan borrowers, the RBI's decision means EMIs are likely to remain steady, offering predictability despite global uncertainties and inflation risks. According to ABP Live, current home loan rates are hovering around 7.25% to 7.5% per annum, with the EMI for a 20-year loan working out to roughly ₹790-810 per month per ₹1 lakh of borrowing. This translates to an EMI of approximately ₹39,500-40,500 for a ₹50 lakh loan, and around ₹79,000-81,000 for a ₹1 crore loan. Industry experts note that a stable interest rate environment allows borrowers to plan finances with greater certainty, without worrying about sudden increases in repayment burden. However, experts also highlight that rising input costs and supply chain disruptions could push property prices higher in coming months, potentially increasing overall home ownership costs.
RBI Governor Sanjay Malhotra highlighted that upside risks to the inflation outlook have increased due to increased energy price pressures and probable weather disturbances affecting food prices. According to The Economic Times, the central bank has projected CPI inflation for FY27 at 4.6%, with Q1 inflation at 4%, Q2 at 4.4%, Q3 at 5.2%, and Q4 at 4.7%. Experts suggest that the central bank's decision reflects a balancing act between inflation concerns and growth support, with heightened global uncertainty, particularly volatility in crude oil prices and supply chain disruptions likely influencing the RBI's decision to hold rates. Despite these risks, the RBI's decision to maintain the status quo reflects confidence in the current economic trajectory and the need for continued monitoring of global uncertainties.
