RBI Keeps Repo Rate Unchanged at 5.5%: Key Highlights and Impact

The Reserve Bank of India (RBI) has kept the repo rate unchanged at 5.5% during its October 2025 Monetary Policy Committee (MPC) meeting. RBI Governor Sanjay Malhotra announced that the MPC has decided to maintain a neutral monetary policy stance. This is the second consecutive time that the repo rates have been kept unchanged, reflecting the central bank's cautious approach in the face of various economic challenges.

The repo rate by the RBI has remained steady at 5.5% on Wednesday, as announced by Governor Sanjay Malhotra. In its previous meeting held in the first week of August, the RBI also kept the repo rate unchanged and maintained its neutral stance on monetary policy. This followed three consecutive cuts totaling 100 basis points across February, April, and June 2025, bringing the repo rate down from 6.5%.

The decision to keep the repo rate unchanged comes at a time when the new GST reforms have been implemented, cutting down tax on daily use items and commodities. Other factors, such as additional tariffs imposed by the US government on essential commodities and the fee hike for H-1B visas, have also played a role in influencing the Reserve Bank of India's decision.

The real estate sector, in particular, could benefit from a reduction in the repo rate. Just as the government has boosted various sectors by cutting GST, a reduction in the repo rate could energize the real estate market. Lower interest rates can make loans more affordable, encouraging more homebuyers to enter the market and potentially stimulating economic growth.

However, the RBI's decision to keep the repo rate unchanged reflects a balance between supporting economic growth and maintaining price stability. Inflation remains a concern, and the central bank is likely to monitor economic indicators closely before making any further adjustments to the repo rate.

The neutral stance of the RBI also indicates that the central bank is prepared to respond to any economic challenges that may arise. The global economic environment, including trade tensions and geopolitical risks, continues to pose uncertainties, and the RBI is likely to remain vigilant in its approach.

In conclusion, the RBI's decision to keep the repo rate unchanged at 5.5% is a carefully considered move to maintain economic stability. While the real estate sector may benefit from a reduction in the repo rate, the central bank is likely to remain cautious in its approach to monetary policy, balancing the need for growth with the need to control inflation.