RBI MPC holds repo rate at 5.25%, retains neutral policy stance

The Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) has kept policy rates unchanged in its latest announcement on Friday, maintaining status quo on the benchmark repo rate since December 2025.

The six-member MPC, chaired by RBI Governor Sanjay Malhotra, voted "unanimously" to keep the repo rate unchanged at 5.25%, maintaining a “neutral” stance. The standing deposit facility (SDF) rate was also maintained at 5.0%, while the marginal standing facility (MSF) rate and the bank rate were kept steady at 5.50%.

The central bank had last reduced the repo rate by 25 basis points (from 5.50%) in December 2025. In the previous bi-monthly policy meeting in April 2026, the apex bank had also left rates unchanged and maintained a “neutral” stance.

“After a detailed assessment of evolving macroeconomic and financial developments and the outlook, the MPC unanimously voted to keep the policy repo rate unchanged at 5.25%. Consequently, the SDF rate remains at 5%, while the MSF rate and the bank rate remain at 5.5%,” the RBI Governor said while announcing the monetary policy decision.

"The MPC has also decided to maintain its neutral policy stance," he added.

The Governor noted that the global economic outlook remains uncertain amid the continuing geopolitical tensions in West Asia, with sharply higher energy prices and persistent supply-chain disruptions weighing on economic activity.

"Faced with difficult trade-offs, monetary policy across the world has become more cautious. Major advanced economy central banks are expected to pivot from monetary tightening, while global equity markets remain buoyant, supported by optimism surrounding artificial intelligence-led growth," he said.

The RBI policy decision was in line with Street expectations, as the central bank was broadly expected to maintain status quo in the June policy announcement.

While the central bank had adopted a relatively growth-supportive stance earlier this year, the escalation of tensions in West Asia has complicated the policy outlook. During FY26, the RBI delivered a cumulative 125 basis-point rate cut, reducing the policy repo rate from 6.50% to 5.25%.

The RBI has also lowered its GDP growth forecast to 6.6% for FY27, from an earlier projection of 6.9%, citing external headwinds and supply-side disruptions.

“After a detailed assessment of evolving macroeconomic and financial developments and the outlook, the MPC voted unanimously to keep the policy repo rate unchanged at 5.25%,” the Governor said, adding that global risks and energy price volatility continue to weigh on the outlook.

Meanwhile, the RBI raised its consumer price index (CPI) inflation forecast to 5.1% for the current fiscal, noting that energy costs and supply-side pressures are likely to keep inflation elevated in the coming months.