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New Delhi: The Reserve Bank of India (RBI)’s Monetary Policy Committee (MPC) has unanimously agreed to keep India’s repo rate unchanged at 5.25% as it aims to keep loans affordable while ensuring inflation remains in check. With the war in the Middle East showing no signs of a truce, the RBI has had to downgrade India’s growth forecast to 6.6% as the disruption in oil supplies from the Middle East continues to affect India’s economy.
Analysts were widely expecting the RBI to hold the Repo rates, as this much-anticipated meeting showed how the RBI aimed to address the economic challenges that came with the Middle East conflict, the threat of a weaker monsoon and a falling Rupee.
“The global environment has deteriorated since the last policy meeting with the conflict lingering amidst a fragile truce. The adverse implications of the extended disruption in supply chains and elevated energy prices are reflected in the moderation of growth and increase in inflation projections from the April policy” RBI Governor Sanjay Malhotra said after the meeting.
— ReserveBankOfIndia (@RBI) June 5, 2026
Following the news, various industry leaders have expressed concerns regarding the rising global market volatility due to the war. They have appreciated the RBI’s repo rate move, given that such rate hikes can have a spillover effect on demand for housing and other aspirational purchases.
“The RBI’s decision to maintain the repo rate at 5.25% and retain a neutral stance reflects a balanced approach towards supporting economic growth while remaining vigilant on inflationary pressures arising from global geopolitical developments,” Mr. Shilpin Tater, Managing Director, Superb Realty said.
“The RBI’s decision to hold the repo rate at 5.25% while retaining a neutral stance is a measured move in the current global context. For the real estate sector, this continuity is positive because it keeps financing conditions broadly stable for homebuyers and developers alike. Mumbai’s housing market has continued to demonstrate resilience, and steady interest rates help sustain purchase decisions, especially in the premium and upper-mid segments. We appreciate the RBI’s focus on inflation management while ensuring that growth momentum is not disrupted.” Ms. Shraddha Kedia-Agarwal, Director, Transcon Developers, said.
“RBI expectedly kept the rate and stance unchanged, while highlighting the amplified risks on the inflation front. We expect 50bp of rate hike beginning in October. On the positive side, the measures taken by the RBI to attract capital would help ease pressure on the INR,” Upasna Bhardwaj, chief economist, Kotak Mahindra Bank said.
“The RBI’s decision to hold the repo rate at 5.25% reflects a clear recognition that today’s inflation pressures are being driven primarily by global supply-side shocks rather than overheating domestic demand,” Sarbvir Singh, joint group CEO, P.B. Fintech, said.
“With energy prices remaining volatile, higher interest rates would have done little to ease inflation while risking a slowdown in credit demand and consumption,” he added.
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