The Reserve Bank of India (RBI) has decided to keep the repo rate unchanged at 5.50% in its third bi-monthly monetary policy of FY2025-26. The decision, announced after a three-day meeting of the Monetary Policy Committee (MPC) led by Governor Sanjay Malhotra, comes amid a backdrop of stable inflation and cautious optimism about India’s economic outlook.
Maintaining a ‘Neutral’ policy stance, the RBI signaled continuity and balance in its approach, emphasizing both price stability and the need to nurture growth. The move was widely anticipated by market analysts, especially after the central bank’s frontloaded rate cuts earlier this year—totaling 50 basis points in the repo rate and 100 basis points in the Cash Reserve Ratio (CRR).
In his address, Governor Malhotra highlighted that while inflation has stayed within the RBI’s comfort range, global risks—including volatility in oil prices and geopolitical tensions—warrant a prudent policy approach. He added that India’s economic fundamentals remain strong, with consumption, investment, and credit demand showing encouraging trends.
“We are confident about the resilience of the Indian economy, but global headwinds require us to be cautious and data-dependent,” said Malhotra during the policy briefing.
The RBI also announced that it will continue to maintain adequate liquidity in the banking system, ensuring smooth credit flow to productive sectors. There were no additional measures on CRR or Statutory Liquidity Ratio (SLR) in this round, indicating that the central bank is in a wait-and-watch mode.
