The Reserve Bank of India’s Monetary Policy Committee (MPC) on Wednesday unanimously decided to keep the benchmark repo rate unchanged at 5.25 per cent, maintaining the status quo for another policy meeting as it assessed heightened global uncertainties and inflation risks.
With the repo rate unchanged, the Standing Deposit Facility (SDF) rate remains at 5 per cent, while the Marginal Standing Facility (MSF) rate and the Bank Rate continue at 5.5 per cent.
The six-member committee also retained its neutral monetary policy stance, signalling that future policy actions will remain data-dependent.
Announcing the decision, RBI Governor Sanjay Malhotra said the global economic environment had become “increasingly unstable”, citing fresh US tariffs, persistent trade uncertainty, geopolitical tensions and volatility in crude oil prices, currencies and financial markets.
“Global growth is projected to soften, while inflation forecast is higher for 2026 vis-à-vis 2025,” the Governor said, adding that central banks across economies remain cautious amid evolving global risks.
The MPC’s decision was in line with economists and market participants, who largely expected the RBI to maintain the status quo despite rising inflationary pressures, citing resilient domestic growth and uncertainty surrounding global commodity prices.
The broad expectation was that the RBI would keep the repo rate unchanged at 5.25 per cent, with economists leaning toward a cautious wait-and-watch stance rather than a hike.
The backdrop was a tricky mix as growth remained resilient, but inflation risks had not fully faded due to volatile crude prices, an uneven monsoon, rupee weakness, and wider geopolitical uncertainty, especially in West Asia.
At the same time, the RBI was still assessing the impact of earlier policy easing, so there was little urgency to tighten again unless inflation pressures became more persistent.
RBI Governor Sanjay Malhotra acknowledged that headline inflation, after remaining below the target for 16 consecutive months, edged higher in June, primarily due to rising food and fuel prices, including fuel-induced inflation in select services such as restaurant prices.
Despite these pressures, the governor said underlying inflation remained contained.
Looking ahead, the governor said the temporal and spatial distribution of the monsoon remains a key uncertainty for food prices. However, proactive supply-side management measures and adequate foodgrain stocks are expected to help contain inflationary pressures.
