The Reserve Bank of India (RBI) has decided to keep its key policy rate, the Repo Rate, unchanged at 5.5% for the second time. This decision, announced by RBI Governor Sanjay Malhotra following the Monetary Policy Committee (MPC) meeting, comes as a welcome relief for borrowers just before the festive season of Diwali.

The decision to maintain the status quo was announced at the October 2025 monetary policy review, with the majority of financial experts and MPC members agreeing that a rate change was not necessary at this time. While a few members suggested a minor cut of 25 basis points (bps), the majority opinion prevailed. The Marginal Standing Facility (MSF) rate and Bank Rate will also remain unchanged at 5.75%. TCL 164 cm (65 inches) 4K UHD Smart QD-Mini LED Google TV 65Q6C

Experts noted that while there was scope for a rate cut, global tariffs, US interest rates, economic incentives, and the domestic inflation scenario factored into the decision. This led economists to conclude that the current rate might be sustained for the remainder of the year.

The committee also considered factors like the political environment, Goods and Services Tax (GST), and tariff hikes. Some analysts anticipate a possible minor rate reduction in December, aiming to mitigate the implementation effects of these factors.

The RBI has collectively cut the rate by 100 basis points since the beginning of 2025. Following a 50 bps reduction in June, the rate was left unchanged in August. The October decision to keep the rate stable was primarily influenced by the current state of physical inflation and the continued rise in food prices. Also Read: Contempt Plea Over Minimum Jail Facilities: Darshan's Lawyer Argues Disparity with Rapist Umesh Reddy's Privileges