The Governor of the Reserve Bank of India, Sanjay Malhotra, announced on Wednesday that the Monetary Policy Committee (MPC) has decided to maintain the repo rate at 5.25%. This decision was made in light of the global uncertainties arising from the West Asia conflict. The repo rate has remained unchanged since its last adjustment in December 2025.
Governor Malhotra stated, “After thoroughly analyzing the macroeconomic and financial developments and the future outlook, the MPC unanimously agreed to retain the policy repo rate.”
Additionally, the standing deposit facility rate stands at 5%, while the marginal standing facility rate and bank rate are held steady at 5.5%. The RBI has also reaffirmed its neutral policy stance.
The Governor highlighted that the decision to hold rates is a response to the heightened global uncertainties due to the ongoing conflict. He mentioned that while inflation is currently under control, there are increasing risks posed by higher energy prices and potential weather-related impacts on food prices.
Core inflation remains subdued, but concerns persist regarding supply chain disruptions and potential secondary effects. The MPC has opted for a cautious approach, citing uncertainties in the future trajectory of inflation.
Regarding economic growth, the RBI acknowledged the robust momentum driven by consumption and investment. However, the Governor cautioned that the West Asia conflict could impede growth through escalated costs and disruptions in the supply chain.
The RBI outlined various risks stemming from the conflict, including the possibility of increased imported inflation and a wider current account deficit due to elevated crude oil prices. The central bank warned of potential impacts on industries, agriculture, investment, consumption, and liquidity in the face of global uncertainty and supply chain disturbances.
Despite these challenges, Governor Malhotra expressed confidence in India’s economic resilience compared to previous crises. The RBI remains vigilant, closely monitoring data and assessing risks, ready to act as necessary.
For now, the RBI has chosen a prudent approach by maintaining stability in rates while observing the evolving global and domestic conditions.