RBI Holds Repo Rate at 5.50% Amid Easing Inflation; Stable Outlook Boosts Real Estate Sentiment

Anurag Mathur, CEO, Savills India

“Amidst sustained economic momentum, moderating inflation and stressful global trade relations, the Monetary Policy Committee (MPC) of the Reserve Bank of India maintained a cautious and calibrated approach, keeping the repo rate unchanged at 5.50%, reaffirming a ‘neutral’ policy stance after three successive rate cuts earlier this year. The decision reflects the RBI’s confidence in India’s macroeconomic fundamentals, with GDP growth projected at 6.5% for FY2025–26, supported by resilient domestic demand and steady investment flows. Retail inflation has eased significantly, with CPI falling to 2.10% in June 2025 – its lowest level since January 2019 – and well within the central bank’s 2-6% tolerance band. India’s growth outlook remains resilient amid global uncertainty, underpinned by strong domestic fundamentals, even as rising U.S. protectionism weighs on trade sentiment. The recent signing of the UK-India FTA marks a significant step forward in strengthening external trade partnerships.

For the real estate sector, policy continuity offers a stable operating environment. Steady home loan rates are supporting end-user activity, particularly in the mid and premium segments, while luxury housing continues to witness demand from aspirational buyers. Developers stand to benefit from enhanced funding visibility, though elevated input costs remain a concern. The festive season, traditionally a high-sales period, is expected to further uplift housing market sentiment.”