In its August 2025 Monetary Policy review, the Reserve Bank of India (RBI) opted to maintain the repo rate at 5.5%, continuing its neutral stance. This decision, unanimously backed by the Monetary Policy Committee (MPC), comes after a series of rate cuts earlier this year totaling 100 basis points. RBI Governor Sanjay Malhotra emphasized that the central bank is allowing previous cuts to fully transmit through the economy before considering further action.
The move reflects confidence in India’s macroeconomic fundamentals. Inflation has cooled significantly, with the Consumer Price Index (CPI) for June dropping to 2.1%—the lowest in over six years. The RBI revised its FY26 inflation forecast downward to 3.1%, while retaining its GDP growth projection at 6.5%, signaling a stable and optimistic outlook.
Governor Malhotra noted, “The monsoon season is progressing well, and the upcoming festival season usually increases economic activity. Combined with supportive government and RBI policies, this situation bodes well for the Indian economy in the near term.”
The real estate sector, which is highly sensitive to interest rate movements, has responded positively to the announcement. Industry leaders believe the RBI’s decision will help sustain housing demand and improve affordability.
Shishir Baijal, Chairman and Managing Director of Knight Frank India, remarked that the RBI’s calibrated approach offers predictability for homebuyers. “Stable rates and surplus liquidity conditions help preserve affordability. With some banks already lowering home loan rates, mid- and low-income housing demand is set to benefit.”
Pramod Kathuria, Founder & CEO of Easiloan, echoed this sentiment, stating, “A stable interest rate scenario ensures risk-free choices for homebuyers and consistent growth for the housing market. This is a positive development for both lenders and borrowers.”
Mahendra Nagaraj, Vice President of M5 Mahendra Group, added that the RBI’s decision continues to drive momentum in housing. “The sustained low-rate environment offers a timely boost of confidence for first-time homebuyers and enables developers to plan with greater financial clarity.”
As India navigates global uncertainties—from trade tensions to capital flow volatility—the RBI’s steady hand is being seen as a signal of trust in the country’s economic resilience. For homebuyers and developers alike, this policy continuity offers a welcome dose of stability in an otherwise unpredictable global landscape.
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