On August 6, 2025, the Reserve Bank of India (RBI) announced it would keep the repo rate unchanged at 5.5%. This decision, made after the latest Monetary Policy Meeting, holds significant implications for borrowers and investors.
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The news is a relief for both existing and prospective homebuyers.
- Existing borrowers can continue to enjoy their current low EMIs (Equated Monthly Installments). The previous rate cuts this year, which totaled 100 basis points, had already brought down home loan interest rates significantly. This pause means those low rates are here to stay for now.
- New homebuyers looking to take out a loan can also benefit. They can secure financing at the current, lower interest rates, which is especially good news ahead of the festive season.
For Investors
The RBI’s decision impacts people with fixed deposits and bonds.
- Fixed deposit (FD) investors will be pleased. With the repo rate holding steady, banks are less likely to further reduce the returns on FDs in the near future. This gives savers an opportunity to lock in their money at the current rates, which have already been lowered by 30-70 basis points since February.
- Bond investors will see minimal short-term impact. Bond yields are typically influenced by changes in the repo rate. Since the rate remains unchanged, the value of existing bonds and new issues should stay relatively stable.
The market will now be watching for the next RBI meeting in October to see if there will be any further changes to the repo rate.
