New Delhi: The Reserve Bank of India (RBI) on Wednesday kept the repo rate unchanged at 5.25 per cent in its latest Monetary Policy Committee (MPC) meeting, maintaining a status quo approach amid global uncertainties.
RBI Governor Sanjay Malhotra announced that the Monetary Policy Committee had decided to keep the repo rate unchanged. The EMI on your home loan, car loan, or other loans linked to the repo rate will not increase, which means that you won’t have to pay higher installments on these loans.
What did the RBI Governor say?
Sanjay Malhotra stated that the Monetary Policy Committee has decided to maintain a neutral stance.
“On the domestic inflation front, there are encouraging figures. Inflation is under control, and the growth outlook is positive. However, food prices have risen slightly,” he said.
The RBI Governor said that the Indian economy remains resilient amid global uncertainties.
Did interest rates come down?
The first Monetary Policy Committee meeting of the new fiscal year, chaired by Reserve Bank of India Governor Sanjay Malhotra, concluded.
During the three-day meeting (April 6-8), the committee members unanimously decided to keep the key interest rate, the repo rate, stable at 5.25 per cent.
All 33 economists tracked by Bloomberg had previously predicted that the RBI would keep rates unchanged, based on assessments of global and domestic conditions.
Since February 2024, the RBI has cut rates by a total of 125 basis points. The last reduction was recorded in December 2025.
Is it a relief news on the inflation front?
Governor Sanjay Malhotra expressed concern about headline CPI (retail inflation). MPC members believe that an upside risk remains on the inflation front. Average inflation is projected to be 4.6 per cent for fiscal year 2026-27. On a quarterly basis, it is expected to be 4 per cent in Q1, 4.4 per cent in Q2, 4.2 per cent in Q3, and 4.7 per cent in Q4.
What is the revision in GDP growth estimates?
Real GDP growth for this year is projected at 6.9 per cent, with Q1 at 6.8, Q2 at 6.7 per cent, Q3 at 7 per cent, and Q4 at 7.2 per cent, Malhotra said.
The RBI has revised its GDP growth forecast for fiscal year 2025-26 (FY26) with caution regarding future growth projections. The growth rate, previously estimated at 7.6 per cent, has now been reduced to 7.3 per cent. This revision was made to account for the potential impact of global uncertainties and geopolitical tensions on the Indian economy.
What is the impact of Middle East tensions?
The MPC meeting expressed deep concern about the ongoing conflict in West Asia. The Governor clarified that while India’s economic fundamentals are strong, the intensity and duration of the conflict could impact India’s GDP growth. According to the MPC, damage to infrastructure and disruptions to the crude oil supply chain due to the conflict could increase inflation and hinder growth.
