The Reserve Bank of India concluded its 61st Monetary Policy Committee meeting on 5 June 2026, keeping the repo rate unchanged at 5.25% with a neutral stance and a unanimous vote.
Key policy rates and MPC decision
- Policy Repo Rate: 5.25%; rate for short-term liquidity to banks against government securities.
- Standing Deposit Facility (SDF): 5.00%; floor of the policy corridor, absorbs overnight liquidity without collateral.
- Marginal Standing Facility (MSF) / Bank Rate: 5.50%; corridor ceiling and long‑term rediscounting reference.
- Policy stance: Neutral; MPC paused rate changes to balance supply shocks and growth momentum.
Macroeconomic projections (FY 2026-27)
- Real GDP growth: Revised to 6.6% from earlier 6.9%.
- CPI inflation: Projected 5.1% (earlier 4.6%); peak near 6.0% in Q3 FY27 before moderation.
- Core inflation: Anchored at 3.7%.
- External price drivers: Domestic crude averaged ~USD 110/barrel (Apr–May 2026), raising transport costs.
Capital-account liberalisations announced
- NRI/OCI equity limits: Permissible equity investment limits for NRIs and OCIs raised to deepen equity funding channels.
- Fully Accessible Route (FAR): Expanded list of specified government securities eligible for unrestricted FPIs.
- Forex inflow incentives: Hedging support for FCNR(B) deposits (3–5 year tenors) and concessional FX swap facilities to encourage ECBs by PSUs.
IASPOINT Booster Facts for UPSC
- Statutory basis: MPC constituted under Section 45ZB of the Reserve Bank of India Act, 1934 (amended).
- Composition: Six members — three from RBI (Governor ex‑officio Chair) and three external members appointed by Government.
- Quorum & voting: Quorum four; each member one vote; Governor has casting vote if tied; minimum four meetings a year.
- Policy corridor width: SDF–MSF spread maintained at 50 basis points around the repo rate.