New Delhi: The Monetary Policy Committee of the Reserve Bank of India has decided to keep the repo rate unchanged at 5.25 percent, maintaining the current policy stance amid global economic uncertainties and geopolitical tensions.
The decision was announced by RBI Governor Sanjay Malhotra after the six member committee concluded its two day deliberations. The move was widely expected by financial markets, reflecting a cautious approach by the central bank in the current global environment.
The announcement came shortly after United States President Donald Trump declared a temporary two week ceasefire with Iran, which helped ease tensions in global markets. The development triggered a positive response in international financial markets and also led to a strong opening for Indian benchmark stock indices.
The Monetary Policy Committee, which meets every two months to assess economic conditions and decide the policy stance, has now kept the repo rate unchanged in multiple recent reviews, including the August, October and February policy meetings.
While maintaining the status quo, the central bank highlighted that India’s macroeconomic fundamentals remain strong despite global challenges. However, the economic outlook has been affected by rising geopolitical tensions and fluctuations in energy prices.
The central bank has projected India’s real GDP growth for the financial year 2026 to 27 at 6.9 percent. According to the quarterly estimates, growth is expected to be 6.8 percent in the first quarter, 6.7 percent in the second quarter, 7 percent in the third quarter and 7.2 percent in the fourth quarter.
Officials also noted that India’s foreign exchange reserves remain strong at 697.1 billion dollars, providing stability against external shocks. At the same time, merchandise exports recorded a slight contraction of 0.2 percent during the first two months of the year.
The committee said inflation currently remains below the central bank’s target of 4 percent but cautioned that risks remain. Possible increases in food prices due to weather disruptions and high global crude oil prices could affect inflation and widen the current account deficit.
The central bank also warned that any disruption in the Strait of Hormuz could have implications for economic growth and global energy supply.
In a separate measure aimed at supporting small businesses, the RBI announced the suspension of certain due diligence requirements for micro, small and medium enterprises seeking access to trade platforms, a move intended to improve ease of doing business and strengthen financial access for MSMEs.
