RBI Repo Rate Cut: This time no change has been made in the repo rate. It has been kept unchanged at 5.25%. This means that the loan will not be expensive, and your EMI will not increase. RBI Governor Sanjay Malhotra announced the decisions taken in the Monetary Policy Committee meeting today, February 6.
The Reserve Bank of India (RBI) had reduced the interest rate by 0.25% to 5.25% in December. The rate at which RBI gives loans to banks is called repo rate. When RBI reduces the repo rate, banks get cheaper loans, and they pass this benefit on to their customers.
Reduction of 1.25% in four installments in 2025
- In February 2025, interest rates were reduced from 6.5% to 6.25%.
- This reduction was done by the Monetary Policy Committee after about 5 years.
- At the second meeting in April, the interest rate was again reduced by 0.25%.
- In June, RBI reduced rates for the third time by 0.50%.
- After a reduction of 0.25% in December, interest rates stood at 5.25%.
Inflation rate may be 2.1% in FY26
According to RBI, the situation regarding inflation is currently satisfactory. Governor Sanjay Malhotra said that the retail inflation rate for the financial year 2026 is estimated to be 2.1%. The inflation rate in the first quarter (Q1) of the financial year 2027 is expected to be 4%. Inflation rate in the second quarter (Q2) may be 4.2%. This estimate for the fourth quarter (Q4) of the financial year 2026 is 3.2%. These figures show that although there may be a slight increase in prices for a short period, overall inflation will remain within the target range of RBI.
Malhotra also emphasized that at present the inflation pressure is low. Its little effect is visible only in the case of precious metals, because their prices keep going up and down globally.
Prices for most other things are under control. Regarding future plans, he said that in the next policy statement in April, RBI will present its estimate of CPI inflation rate for the entire year. By then, more data will be available under the new series.
