RBI keeps repo rate unchanged at 5.25% amid inflation and West Asia tensions

The Monetary Policy Committee of the Reserve Bank of India (RBI) decided on 5 June to leave the repo rate unchanged at 5.25 percent and to maintain a neutral policy stance. Governor Sanjay Malhotra said the decision was taken after a detailed review of economic and financial conditions, and that the central bank prefers to observe how the situation develops rather than adjust rates prematurely.

The RBI cited a subdued retail inflation rate that remains below its target, but warned that rising global energy prices and supply‑chain pressures linked to the ongoing West Asia conflict could push inflation toward the upper end of the tolerance band. Domestic growth is supported by strong private consumption, investment and manufacturing, with GDP growth recorded at 7.6 percent in the previous fiscal year. The bank also noted potential monsoon shortfalls that could affect agricultural output, but highlighted government measures to mitigate the impact. Overall, the RBI signaled vigilance while keeping monetary policy unchanged for now.