RBI Keeps Repo Rate Unchanged – What It Means for India’s Economy

The Reserve Bank of India (RBI) has decided to keep the repo rate unchanged in its latest Monetary Policy Committee (MPC) meeting held in August 2025. This marks yet another step in the central bank’s cautious approach to balancing economic growth and inflation control.

What is the Repo Rate and Why It Matters?

The repo rate is the rate at which RBI lends money to commercial banks. It directly influences the interest rates on loans, EMIs, and fixed deposits.

• No Change in Repo Rate: Means borrowing costs remain stable for now.
• Impact on Home Loans & EMIs: EMIs will likely remain unchanged for existing borrowers.
• Fixed Deposits: Interest rates on FDs may stay steady in the near term.

Why Did RBI Maintain the Rate?

RBI Governor stated that while inflation has shown signs of easing, global economic uncertainty and uneven monsoon rains could still pose risks to food prices.
Key factors behind the decision:

• Inflation still hovering above comfort levels.
• Need to support economic growth amid global slowdown fears.
• Stability in the Indian rupee and foreign exchange markets.

RBI’s Inflation and Growth Forecast

• GDP Growth Projection: RBI maintains FY25 growth forecast at around 7%.
• Inflation Outlook: Expected to moderate in the coming months but remain closely monitored.

What This Means for You

• Borrowers: No immediate relief or hike in EMIs.
• Savers: Deposit rates unlikely to change drastically.
• Investors: Stock markets may see stability due to policy continuity.

Final Word

The RBI’s decision to keep the repo rate unchanged reflects a balanced approach – keeping inflation in check while supporting economic activity. For households and businesses, it means financial stability in the short term, but future changes will depend on how global and domestic conditions evolve.