RBI repo rate February 2026: What experts expect on home loan EMIs and interest rate cuts

Over the past year, the RBI has cut the repo rate by a cumulative 125 basis points (bps) since February 2025. With inflation largely under control and economic growth showing resilience, many experts believe the central bank may now opt for a pause, signalling a possible end to the current rate-cut cycle.

"RBI is thus likely to maintain status quo in the upcoming policy," said SBI Research report.

“The RBI cut the policy rate in December, when the MPC preferred to provide more weightage to inflation being below the lower bound of the Flexible Inflation Targeting (FIT) framework. With inflation likely to move higher (even in the new base year series to be published starting February 12), there is little reason for moving in with further cuts,” Yes Bank said in a recent report.

“We think we have seen the last of the rate cuts in this cycle and should expect a long pause (difficult to determine the length of the pause), unless growth tends to underperform (not our base case),” the report said.

According to global brokerage Bank of America (BofA), the trade deal boosts growth outlook, reducing the need for further repo rate cuts by the RBI MPC, also marking a possible end to the rate-cut cycle for now. The MPC may retain a neutral policy stance.

Bank of America (BofA) Securities, in its latest report, says, “As stated in our preview note, for the policy that while there is space for the MPC to provide a growth supportive rate cut, it remained contingent on India achieving a trade deal with the US which has remained one of the key sources of uncertainty for the growth outlook (India Viewpoint: RBI’s Occam’s policy: Choosing the simplest path). The deal now would boost the growth certainty, and the current momentum seen in high-frequency indicators can continue to sustain. We therefore change our rate cut call of 25bps to HOLD for the upcoming Feb 6th meeting however, maintain the need to provide liquidity support to aid the transmission of rate cuts. We also believe RBI is now done cutting rates but will continue to manage its liquidity provisions carefully to ensure rate transmission remains active.”

"The MPC looks likely to hold on to the repo rate, and this could also be the end of the rate-cutting cycle," Madan Sabnavis, Chief Economist of Bank of Baroda, said, PTI reported.

"We lean towards a hold this time and the RBI may prefer to keep powder dry for future policy actions," PTI quoted Crisil Chief Economist Dharmakirti Joshi.

Here’s what it means specifically for interest rates

• Home loan and other retail interest rates are likely to remain at current levels, as there is no fresh repo rate cut to trigger reductions.

• With no rate cut, banks are unlikely to lower fixed deposit rates in a hurry, especially amid tight liquidity conditions.

• Banks may pass on earlier rate cuts gradually, but no new rate cut benefit will flow from this policy decision.

Impact on home loan EMIs

• No immediate reduction in EMIs for existing home loan borrowers.

• If your loan is linked to an external benchmark (repo-linked), your EMI will remain unchanged.

The decision of RBI Governor Sanjay Malhotra-headed six-member Monetary Policy Committee (MPC) will be announced on Friday, 6 February.

In December, the RBI had reduced the repo rate by 25 basis points to 5.25 per cent, after leaving it unchanged in the preceding two MPC meets.