Reserve Bank of India maintains repo rate at 5.25 per cent

The Reserve Bank of India (RBI) has maintained its benchmark repo rate at 5.25 per cent, marking the fourth consecutive time the Monetary Policy Committee (MPC) has opted to keep interest rates unchanged.

RBI Governor Sanjay Malhotra indicated a preference for waiting for greater certainty regarding the inflation trajectory before considering any policy recalibration. While the Indian economy performed better than expected in Q1:2026-27, policymakers remain concerned about supply-side risks. These include patchy southwest monsoon rainfall, El Niño conditions, and potential inflationary pressures from rising energy costs linked to geopolitical tensions in West Asia.

Inflation has recently edged higher, with headline consumer price inflation reaching 4.38 per cent in June 2026, crossing the RBI's medium-term target. Governor Malhotra noted that while evidence of inflation becoming generalized or de-anchoring expectations is currently limited, the central bank remains watchful. Any signs of food, fuel, or other input prices translating into broad-based inflation may necessitate policy tightening.