Reserve Bank of India Holds Repo Rate at 5.25% Amid Global Risks

The Reserve Bank of India (RBI) kept its benchmark repo rate unchanged at 5.25% for the second consecutive policy review, with Governor Sanjay Malhotra stating the central bank maintains a neutral stance. The decision came as the Monetary Policy Committee noted heightened uncertainty from the West Asia conflict, rising crude oil prices, El Niño‑related agricultural worries and a weakening rupee that has fallen about 7% this year.

While retail inflation eased to roughly 3.5% in April, the RBI trimmed its FY27 GDP growth forecast to 6.6% from 6.9% and raised its CPI inflation outlook for the year to around 5.1%. The central bank signaled caution over upside inflation risks from fuel price pressures, supply‑chain disruptions and a potentially weak monsoon. Despite the rate hold, borrowers’ home and personal loan EMIs remain unchanged, and banks are expected to keep loan interest rates steady.

Analysts had mixed expectations, with some forecasting a possible hike to curb rupee depreciation, but the RBI opted to pause rate changes while monitoring external shocks.