The Reserve Bank of India (RBI) has decided to keep the repo rate unchanged at 5.25% after the latest meeting of the Monetary Policy Committee (MPC).
The central bank has maintained its neutral policy stance amid global uncertainties, including geopolitical tensions, changing trade conditions, and volatility in crude oil and financial markets.
RBI Maintains All Key Policy Rates
After the three-day MPC meeting, the RBI decided to continue with the existing interest rate structure.
The latest policy rates are:
Repo Rate: 5.25%
Reverse Repo Rate: 3.35%
Standing Deposit Facility (SDF): 5%
Marginal Standing Facility (MSF): 5.50%
Bank Rate: 5.50%
The RBI had also kept the repo rate unchanged at 5.25% in its previous policy review in June.
Why Did RBI Keep Rates Unchanged?
RBI Governor Sanjay Malhotra said global economic conditions remain uncertain.
The central bank highlighted concerns such as:
Fresh US tariffs affecting global trade.
Ongoing tensions in West Asia.
Volatility in crude oil prices.
Fluctuations in financial markets.
While the Indian economy continues to show resilience, the RBI noted that risks related to inflation and economic growth still remain.
RBI’s Inflation and Growth Forecast
The RBI has projected Consumer Price Index (CPI) inflation at 5% for the current financial year.
The quarterly inflation estimates are:
First quarter: 5.3%
Second quarter: 4.7%
Third quarter: 5.9%
Fourth quarter: 5.5%
Core inflation for the year has been estimated at 4.3%.
The central bank also expects economic growth to remain stable but has highlighted challenges due to global uncertainty, supply chain issues, geopolitical tensions, and higher energy prices.
Impact on Loans and Deposits
Since the repo rate has remained unchanged, there is unlikely to be any major immediate change in interest rates on home loans, personal loans, and other borrowings.
Similarly, bank deposit rates may also remain largely stable unless individual banks make separate adjustments.
The RBI said liquidity conditions in the banking system are expected to improve due to seasonal factors, government cash movements, and steps taken to attract capital inflows.
With this decision, the RBI has chosen to maintain stability while closely monitoring inflation, growth, and global economic developments.
