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RBI Repo Rate: The first meeting of the financial year of the Reserve Bank of India i.e. RBI was held on 8 April. The results of the Monetary Policy Committee meeting were informed by RBI Governor Sanjay Malhotra. The Reserve Bank of India decided not to change the repo rate in the first meeting of the financial year 2026-27. It has been retained at 5.25%. That means the loan will not be expensive and your EMI will also not increase. Whereas the real GDP growth rate for the financial year 2026-27 is estimated to be 6.9 percent. This figure is less than the real GDP growth of 7.6 percent recorded in FY26. Whereas the inflation rate is expected to be 4.6 percent. This is close to RBI’s target of 4 percent.

Earlier in February also there was no change in the repo rate. RBI last reduced the interest rate by 0.25% to 5.25% in December 2025. The rate at which RBI gives loans to banks is called repo rate. When RBI reduces the repo rate, banks pass this benefit on to the customers.

Announcing the first bi-monthly monetary policy for the current fiscal year, the RBI MPC unanimously decided to keep the repo rate at 5.25 per cent, and adopted a neutral stance. This decision has been taken amid hopes of global improvement after the ceasefire in the six-week-long US/Israel-Iran conflict. Announcing the policy decision, the RBI Governor said that since the last policy meeting, geopolitical uncertainties have increased. The Governor said that high frequency indicators show that the pace of growth remains strong, but the ongoing war in the Middle East is likely to impact this pace. In view of this, he reduced the growth estimates for the first and second quarters (Q1 and Q2) of the current financial year to 6.9 percent and 6.8 percent respectively. Meanwhile, growth is expected to accelerate in the second half of the year, with estimates for the third quarter (Q3) set at 7 percent and the fourth quarter (Q4) at 7.2 percent.

Inflation rate below target for FY27

For the new fiscal year, CPI inflation is estimated at 4.6 percent, with quarterly estimates at 4.0 percent for the first quarter (Q1) and 4.4 percent for the second quarter (Q2). While the estimate for the first quarter (Q1) remains the same, for the second quarter (Q2) it has been revised marginally higher from 4.2 per cent earlier. Inflation is expected to increase to 5.2% in Q3, after which it will decline to 4.7% in Q4. Core inflation is estimated to be 4.4 percent. The Central Bank said that this is the first time that such detailed information has been presented, which reflects the demand of some stakeholders.

Reason for not changing the interest rate

According to the RBI Governor, the danger of another surge in inflation is not over yet. There is a possibility of increase in the prices of fruits, vegetables and grains due to bad weather and unseasonal rains. The supply chain is being adversely affected due to the Iran-Israel war. RBI is currently adopting the policy of ‘wait and see’. In view of the turmoil in the global market, RBI does not want to take any decision in haste. The bank currently wants to keep an eye on the economic conditions around the world. For this reason the interest rate was not changed.

What is repo rate, how does it make loan cheaper?

The interest rate at which RBI gives loans to banks is called repo rate. Due to low repo rate, the bank will get loan at low interest. When banks get cheaper loans, they often pass the benefit on to their customers, that is, banks also reduce their interest rates.

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