RBI Repo Rate: The RBI has once again decided to keep the policy interest rate, known as the repo rate, steady at 5.25%. This announcement was made today by RBI Governor Sanjay Malhotra during a briefing for the Monetary Policy Committee (MPC) regarding the outcomes of their meeting. This marks the first MPC meeting of the financial year and the first since the onset of the Iran war. The Monetary Policy Committee has opted to maintain a neutral stance. The RBI had also kept the repo rate steady in February. Prior to this, it had been reduced by a total of 125 basis points in 2025.
The repo rate is the interest rate at which the RBI lends to banks. A reduction in this rate leads to lower installments for home loans, personal loans, and car loans. Economists had predicted that the RBI would keep the repo rate unchanged. However, there was speculation that the ceasefire in West Asia might lead the RBI Governor to announce an unexpected rate cut. Nevertheless, the RBI MPC chose to keep it unchanged.
In presenting the first bi-monthly monetary policy review for the current fiscal year, the RBI Governor noted that while the crisis in West Asia has affected supply chains, India’s economic fundamentals remain robust compared to many other nations. Key indicators reflecting the economic trajectory suggest that economic activity is on the rise.
Real GDP growth is anticipated to reach 6.9 percent in the fiscal year 2027. Growth is projected to be 6.9 percent in the first quarter of this fiscal year, 6.8 percent in the second quarter, and 6.7 percent in the third quarter, in contrast to 7.6 percent in the previous fiscal year.
RBI MPC meeting updates
The RBI has once again not altered the repo rate.
The Governor made this announcement following the MPC meeting.
The Monetary Policy Committee has upheld its neutral stance.
The GDP growth rate is forecasted to be 6.9 percent.
Inflation is expected to be 4.6 percent this year.
Sanjay Malhotra said headline inflation is within control and below the central bank’s 4 percent target. Inflation is projected to be 4.6 percent this fiscal year. It could reach 4 percent in the first quarter, 4.4 percent in the second quarter, 5.2 percent in the third quarter, and 4.7 percent in the fourth quarter. The recent surge in energy prices has emerged as a risk to inflation. The outlook for food prices remains favorable in the near term.
