Repo rate changes in 2025: What borrowers and investors should know going into 2026

The decision of the Reserve Bank of India (RBI) Monetary Policy Committee (MPC) will be announced by Governor Sanjay Malhotra on Friday, 5 December 2025.

RBI MPC commenced its three-day deliberations on December 3. The meeting is taking place against the backdrop of falling inflation, rising GDP growth, and ongoing geopolitical tensions.

What happened to the repo rate in 2025

This will be the last MPC of 2025. The year 2025 is about to wrap and in just a few weeks, we will welcome 2026.

Let's take a look at repo rate changes in 2025, and what borrowers and investors should know going into 2026

• In February 2025, the policy rate was cut by 25 bps, from 6.50% to 6.25%.

• In April 2025, there was another cut by 25 bps, bringing the rate down to 6.00%.

• In June 2025, the RBI made a more aggressive cut, 50 bps, lowering the repo rate to 5.50%.

After that, in August and October reviews, there was no change announced in the repo rate, and it stayed at 5.50%. The central bank also adopted a “neutral” policy stance.

What this means for borrowers

Even though RBI cuts rates, actual reduction in your loan’s interest rate depends on how quickly your bank passes on the cut.

What this means for investors

The impact is negative for fixed deposit investors. Banks typically lower the interest rates they offer on FDs, reducing the return for savers.

What to watch going into 2026

If you are planning to take a new loan or if you have a current loan with an interest rate that changes (a floating-rate loan), now could be a good time to consider refinancing or choosing a fixed-rate option.

For investors mainly relying on fixed-income investments, you might find the returns are still pretty low. You are not likely to make a lot of money just sitting in these safer options.

If you are aiming for higher returns, you will probably need to allocate some of your money to things like stocks and mutual funds. If you are unsure about where to invest, it's always better to consult a financial planner for investment advice.