The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) decided on Wednesday to keep the key policy interest rate—the repo rate—unchanged at 5.25 percent. This marks the fourth consecutive time the RBI MPC has left interest rates unaltered. The decision was taken amidst global geopolitical tensions, trade uncertainties, and ongoing volatility in international financial markets.
The repo rate was last revised during the RBI MPC meeting in December 2025, when it was reduced from 5.50 percent to 5.25 percent.
The RBI has maintained the Standing Deposit Facility (SDF) rate at 5 percent, while keeping the Marginal Standing Facility (MSF) rate and the Bank Rate unchanged at 5.5 percent.
RBI Governor Sanjay Malhotra stated that global trade uncertainties persist due to new tariffs imposed by the US. Meanwhile, the ongoing crisis in West Asia is causing volatility in crude oil prices and global financial markets.
Economists had already predicted that the six-member MPC would not alter interest rates this time either and would maintain a neutral policy stance.
Although there has been some rise in the inflation rate in recent months, it remains within the tolerance band set by the RBI. Rising crude oil prices, fluctuations in the rupee’s exchange rate, and the situation in West Asia remain key concerns for the central bank.
At the same time, the domestic economy remains robust. Growth is being supported by improved economic activity, a favourable monsoon, and strong foreign capital investment.
Governor Sanjay Malhotra noted that the Indian economy remains resilient, although early signs of pressure are visible in some sectors. He added that significant risks persist regarding both inflation and economic growth.
It is worth noting that during the June monetary policy review as well, the MPC had unanimously decided to keep the repo rate unchanged at 5.25 percent. At that time, the RBI had lowered its real GDP growth projection for the 2026-27 fiscal year from 6.9 percent to 6.6 percent. The central bank cited global uncertainties, geopolitical tensions, supply chain disruptions, and rising energy prices as the primary reasons for this revision.
