RBI Keeps Repo Rate Unchanged At 5.25%, Retains Neutral Policy Stance

The Reserve Bank of India (RBI) on Wednesday kept the policy repo rate unchanged at 5.25 per cent, with the Monetary Policy Committee (MPC) maintaining its neutral policy stance amid persistent global trade uncertainties and geopolitical tensions.

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.

Announcing the MPC’s decision, RBI Governor Sanjay Malhotra said global trade uncertainties persist due to fresh tariff measures by the United States. He also highlighted volatility in crude oil prices and financial markets due to the ongoing crisis in West Asia.

The policy decision was largely in line with market expectations, with economists anticipating that the six-member MPC would maintain the status quo on both interest rates and its neutral monetary policy stance.

The central bank noted that while inflation has moderated compared to previous highs, it has shown some upward movement in recent months and remains influenced by factors such as crude oil prices, exchange rate movements and geopolitical developments. However, inflation continues to stay within the RBI’s prescribed tolerance band.

On the domestic front, the RBI said economic activity remains resilient, supported by healthy growth momentum, favourable monsoon conditions and sustained foreign capital inflows.

Governor Malhotra said the Indian economy continues to demonstrate resilience but cautioned that signs of stress are emerging in certain segments. He added that considerable risks remain around both inflation and growth prospects, warranting a cautious policy approach.