0 months ago
RBI Holds Repo Rate at 5.25%, Raises FY27 GDP Forecast
The Reserve Bank of India is the central bank that helps manage India's money.
Its leaders and an expert committee met to decide what to do with interest rates.
They decided to keep the main interest rate, called the repo rate, the same at 5.25%.
Keeping rates the same means loans and EMIs will not get more expensive right now.
They also predicted that India's economy will grow a bit faster this year, by 6.7%.
They think prices of things will rise by about 5%, a little above their usual comfort level.
The leaders waited because food and fuel prices are uncertain right now.
Conflicts in West Asia, weather changes like El Nino, and other world problems could change things.
The governor said they want to see more clarity before making any changes.
The RBI kept the repo rate unchanged at 5.25% and retained its 'Neutral' policy stance, with reports differing on whether it was the third or fourth consecutive hold.
The FY27 GDP growth forecast was upgraded to 6.7% from 6.6%, supported by resilient domestic demand, manufacturing, services activity and robust exports.
The FY27 CPI inflation forecast was trimmed to 5.0% from 5.1%, with headline inflation expected to peak in Q3 FY27 before moderating.
The SDF rate stays at 5.0%, while the MSF rate and the Bank Rate remain at 5.5%.
The RBI flagged risks including the West Asia conflict, fresh US tariffs, volatile crude oil prices, El Nino conditions and an uneven monsoon, and reported forex reserves of $692.9 billion as of July 31.
- Who
- The Reserve Bank of India's Monetary Policy Committee, led by Governor Sanjay Malhotra
- What
- Kept the repo rate unchanged at 5.25%, raised the FY27 GDP growth forecast to 6.7%, and lowered the FY27 inflation forecast to 5.0%
- Where
- India, at the Reserve Bank of India
- When
- At the RBI's third bi-monthly monetary policy meeting of the year, announced on Wednesday
- Why
- To wait for greater clarity on the inflation path amid risks from food and fuel prices, the West Asia conflict, volatile crude oil and global uncertainties
Key facts
- Repo Rate
- 5.25% (unchanged)
- Policy Stance
- Neutral
- FY27 GDP Growth Forecast
- 6.7% (raised from 6.6%)
- FY27 CPI Inflation Forecast
- 5.0% (lowered from 5.1%)
- SDF Rate
- 5.0%
- MSF Rate / Bank Rate
- 5.5%
- Foreign Exchange Reserves
- $692.9 billion as of July 31
- Average Daily System Liquidity Surplus
- Rs 1.0 lakh crore since the June 2026 MPC meeting
Quotes
RBI Governor Sanjay Malhotra
Governor of the Reserve Bank of India
“The outlook, however, is hazy because of the uncertainties regarding South's global trade policy. There is a need for greater clarity to emerge, especially regarding inflation, its path and composition before taking any policy action.”
freepressjournal.in
financialexpress.com
“Growth continues to be supported by resilient domestic demand, sustained expansion in manufacturing and services activity, and robust exports, reaffirming India’s position as the world’s fastest‑growing major economy.”
financialexpress.com
Sources
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