The Reserve Bank of India (RBI) has announced its decision to keep the repo rate unchanged at 5.25 percent, maintaining the benchmark lending rate at its three-year low as the fiscal year 2026 begins. The central bank’s decision is widely interpreted as a strategic move to bolster economic stability and sustain growth momentum in the face of lingering global financial uncertainties. By holding the rate steady, the RBI aims to provide a predictable environment for borrowers and investors alike, signaling a commitment to a pro-growth monetary stance.
Also read: RBI to maintain low repo rate: Sanjay Malhotra
The Monetary Policy Committee (MPC) reportedly considered various macroeconomic indicators before arriving at this consensus. A primary driver for the decision was the need to navigate recent trade developments involving the United States and Europe, which have introduced new variables into the global economic equation. Despite these external pressures, domestic headline inflation remains within the RBI’s comfort zone, allowing the central bank to prioritize growth without the immediate pressure to tighten liquidity.
Industry leaders have welcomed the move, particularly within the real estate sector, which is highly sensitive to interest rate fluctuations. Shrinivas Rao, FRICS, CEO of Vestian, highlighted the positive implications for the market.
“The year 2026 began with the repo rate being maintained at its three-year low. This is expected to enhance stability and provide an impetus to economic growth amid prevailing global uncertainties. Meanwhile, the RBI is also assessing market reactions following recent trade developments with the US and Europe. Taking cognizance of these factors, the repo rate is anticipated to remain stable in the coming months, supported by controlled headline inflation and robust economic growth.”
Rao further added, “The real estate market continues to be supported by low mortgage rates, which are stimulating demand. Affordable financing for developers, along with the ready availability of foreign capital, is expected to accelerate construction activity nationwide and help narrow the demand supply gap.”
The stability in interest rates is expected to have a cascading effect across the housing sector. For prospective homebuyers, the unchanged repo rate translates to steady home loan interest rates, removing the fear of immediate EMI hikes. This predictability is crucial for end-users who are often deterred by volatility in the cost of borrowing.
Amit Goyal, MD, India Sotheby’s International Realty, emphasized the confidence this policy instills in the market.
“The RBI holding the repo rate steady, largely in line with expectations, brings a sense of reassurance to the housing market. For homebuyers, especially end-users, it reinforces confidence to move ahead with long-term decisions without worrying about sudden cost shifts. At the same time, globally, many major central banks have also adopted a cautious stance on interest rates amid moderating inflation. For investors, a consistent policy environment strengthens India’s credibility as a long-term real estate destination. A stable monetary environment also strengthens India’s appeal to domestic and global investors, reinforcing optimistic moderation in the market’s long-term fundamentals, despite global headwinds.”
Pradeep Aggarwal, Founder & Chairman, Signature Global (India) Ltd. welcomed the stability brought by this move, saying, “The RBI’s decision to hold the repo rate steady at 5.25% offers stability for interest-rate–sensitive sectors like real estate in the current macroeconomic environment. With inflation remaining at manageable levels and the benefits of earlier rate cuts continuing to flow through to homebuyers in the form of improved affordability, residential demand has remained resilient. The Union government’s decision to raise public capital expenditure to ₹12.2 lakh crore in FY27, as announced in the Union Budget 2026, further strengthens the growth outlook through infrastructure-led development.
Supported by stable monetary policy and sustained public spending, the real estate sector will continue to play a pivotal role in driving economic growth, employment generation, and urban development across the country.”
Ashok Kapur, Chairman, Krishna Group and Krisumi Corporation hailed the supportive move by the RBI as well. “The RBI’s decision to keep the repo rate unchanged at 5.25% reinforces policy stability and provides a supportive backdrop for the residential real estate market. While a rate cut would have lowered borrowing costs, a steady interest rate environment enables homebuyers to take long-term purchase decisions with greater confidence and predictability. This is particularly relevant for the premium housing segment, where buyers place stronger emphasis on product quality, location, and long-term value creation rather than short-term rate movements.”
Vikas Bhasin, Managing Director, Saya Group, pointed out this move as one that will build confidence on all fronts. “The RBI’s decision to maintain the status quo on policy rates is a positive and reassuring signal for the housing sector. Stability in interest rates plays a crucial role in homebuyer decision-making, as it reduces uncertainty and builds confidence among both end-users and investors. With home loan rates currently hovering around an affordable and comfortable level of approximately 7.5%, and expected to remain below 8% for an extended period, borrowing conditions remain supportive for residential purchases.”
Raoul Kapoor, Co CEO, Andromeda Sales and Distribution, offered his thoughts, saying, “The RBI’s decision to maintain a status quo on policy rates is largely in line with expectations, especially after the cumulative rate cut of 125 basis points in 2025. The transmission of these cuts is still playing out, with several banks yet to fully pass on the benefit to borrowers.
A cumulative reduction of 125 basis points over a 20-year loan tenure translates into an EMI reduction of approximately ₹80 per lakh per month, significantly improving affordability and enhancing borrowing capacity for big-ticket purchases such as homes.”
As the financial year progresses, the RBI’s stance is likely to encourage increased capital flow into infrastructure and housing projects, further cementing India’s position as a resilient economy in a fluctuating global landscape.
