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RBI Repo rate: Home loan borrowers may see some relief in February, as the Reserve Bank of India (RBI) could cut interest rates further in its next monetary policy review.

According to a report by Union Bank of India, the RBI may reduce the repo rate by 25 basis points in the February policy meeting. This could take the benchmark repo rate down to 5 per cent.

The report said there is room for one final 25 basis points rate cut, either in February or April 2026. This view is based on the RBI’s dovish policy guidance and easing inflation pressures.

It noted that the central bank has repeatedly highlighted benign inflation conditions and muted underlying price pressures. The report added that if the inflation impact of around 50 basis points from gold prices is adjusted, overall inflation appears even more moderate.

“We see scope for a final 25 bps rate cut in February or April 2026. Given the dovish policy guidance, we cannot rule out the possibility of a final 25 bps rate cut in the February 2026 meeting to a 5.0 per cent repo rate,” the report said.

However, the timing of the final rate cut remains uncertain. The report pointed out that the revision of the Consumer Price Index (CPI) and Gross Domestic Product (GDP) base years, scheduled for February 2026, could influence the RBI’s decision.

In this backdrop, the Monetary Policy Committee (MPC) may adopt a wait-and-watch approach to reassess inflation and growth trends after the revised data is released.

In its December policy meeting, the MPC had cut the repo rate by 25 basis points to 5.25 per cent. The decision was announced by RBI Governor Sanjay Malhotra after the three-day meeting held from December 3 to 5.

The governor said the decision followed a detailed assessment of evolving macroeconomic conditions and the growth-inflation outlook.

The RBI’s next MPC meeting is scheduled for February 4, 5 and 6, 2026. Markets and home loan borrowers will closely track the outcome for signals on further rate cuts and the future path of interest rates.