RBI keeps repo rate steady at 5.5% as effects of past cuts unfold

For loan borrowers, the decision means no additional relief on EMIs for now.

The RBI-led MPC has already lowered the repo rate by 100 basis points (1%) so far this year, but the transmission into lending rates has been slower than expected.

Officials expect monthly loan instalments to come down further in the coming months as the rate cuts work their way through the system.

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“The coordinated use of various tools available to us has helped accelerate monetary policy transmission in the current easing cycle. The Monetary Policy Committee met on the fourth, fifth and sixth of August to deliberate and decide on the policy repo rate.

"After a detailed assessment of the evolving macroeconomic and financial developments and outlook, the MPC voted unanimously to keep the policy repo rate under the liquidity adjustment facility unchanged at 5.5%,” Malhotra said.

He said monetary policy transmission is continuing, adding that the impact of the 100 basis points rate cut since February 2025 on the broader economy is still unfolding.

"On balance, the current macroeconomic conditions, outlook and the uncertainties call for continuation of the policy repo rate of 5.5% and wait for further transmission of the front-loaded rate cut to the credit markets and to the broader economy,” he stated.

The central bank’s policy comes amid fresh global concerns. US President Donald Trump has announced a 25% tariff on Indian exports, threatening to hike it “very substantially” within 24 hours if India does not halt oil imports from Russia.

Trump administration officials have accused New Delhi of “financing” Russia’s war against Ukraine by continuing its energy trade, marking a fresh source of geopolitical pressure that could weigh on India’s macroeconomic environment.