RBI MPC Meeting: Central Bank Decides To Keep Repo Rate Unchanged
Notably, the RBI MPC began its three-day review on Monday with markets keenly watching the decision on benchmark lending rates.
Governor Sanjay Malhotra on Wednesday revealed that the central bank has opted to maintain a status quo on key repo rates. Sharing the decision of the Reserve Bank of India's Monetary Policy Committee (MPC) today morning, the governor said that the panel decided to keep the key rates unchanged unanimously.
Currently, the repo rate stands at 5.5 per cent. The RBI also announced that the Marginal Standing Facility (MSF) rate and the Bank Rate will remain unchanged at 5.75 per cent. The MPC reaffirmed its decision to maintain the policy stance at neutral.
Growth and Inflation Outlook
The global economy has shown greater resilience than expected in 2025, driven by robust growth in the US and China. However, the outlook remains clouded amid persistent policy uncertainty. Inflation continues to exceed targets in some advanced economies, presenting additional challenges for central banks as they navigate evolving growth-inflation dynamics.
Financial markets have experienced heightened volatility, with the US dollar strengthening following upward revisions to US growth for the second quarter. Treasury yields have also risen, reflecting shifts in policy rate expectations. Despite these fluctuations, equity markets have remained buoyant across a number of advanced and emerging economies, reflecting continued investor confidence in global growth prospects, the governor noted.
The Monetary Policy Committee (MPC) observed a notable moderation in inflation, even as prevailing global uncertainties and tariff-related developments are expected to slow growth in the second half of FY2025-26 and beyond. The current macroeconomic environment, combined with the outlook, has created room for policies aimed at further supporting growth.
However, the committee noted that the effects of front-loaded monetary policy actions and recent fiscal measures are still unfolding. Trade-related uncertainties are also continuing to evolve. In this context, the MPC deemed it prudent to wait for the full impact of existing policy measures and for greater clarity to emerge before determining the next steps.
Accordingly, the MPC unanimously decided to maintain the policy repo rate at 5.5 per cent and retain the overall stance at ‘Neutral’. Nevertheless, two members, Dr Nagesh Kumar and Prof Ram Singh, expressed a differing view, suggesting that the stance be shifted from neutral to accommodative.
Notably, the RBI MPC began its three-day review on Monday with markets keenly watching the decision on benchmark lending rates. The RBI has already delivered cumulative rate reductions of 100 basis points since February 2025 to boost economic momentum. In the August policy meeting, the MPC had left rates unchanged after a series of earlier cuts.
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