The Reserve Bank of India has retained the repo rate at 5.25 per cent in its first bi-monthly monetary policy for the current fiscal. The Monetary Policy Committee voted unanimously to maintain a neutral stance. The decision keeps the standing deposit facility rate at 5 per cent and the marginal standing facility rate and Bank Rate at 5.50 per cent. The central bank has also revised its growth and inflation outlook for the year, while flagging risks from elevated energy prices, West Asia tensions and possible El Niño conditions.
Policy Rate Decision
The MPC decided to leave key policy rates unchanged after reviewing the growth-inflation balance. A neutral stance indicates that the RBI will remain data-dependent and respond to changing economic conditions. The committee began its meeting on Monday under the chairmanship of the Governor.
Growth and Inflation Projections
- The RBI expects GDP growth for the last financial year at 7.6 per cent.
- For the current fiscal year, GDP growth is projected at 6.9 per cent.
- CPI inflation for the current financial year is projected at 4.6 per cent.
- The central bank sees upside risks to inflation from energy prices and weather-related pressures.
Risks from West Asia Conflict
The RBI said the conflict in West Asia may affect growth through higher energy costs, freight charges and insurance premiums. Supply-chain disruptions could also reduce the availability of key inputs for downstream industries. The central bank has adopted a wait-and-watch approach as the situation remains fluid.
Rupee and Exchange Rate Policy
The Governor noted that the rupee has depreciated more than the average seen in previous years during 2025-26. The RBI reiterated that exchange rates remain market-determined. Intervention in the foreign exchange market will be limited to smoothing excessive and disruptive volatility, without targeting any specific level or band.
Last Modified: April 28, 2026