New Delhi: The Reserve Bank of India has decided to maintain the repo rate at 5.25 percent in its first monetary policy announcement following the Union Budget 2026. The decision was taken during the three day meeting of the Monetary Policy Committee, which reviews the country’s financial and economic conditions every two months.
RBI Governor Sanjay Malhotra said the choice to hold the key lending rate was in line with expectations, given the steady growth momentum and easing concerns over global trade tensions after a recent agreement with the United States. He noted that the international development was positive for India, which continues to remain among the fastest growing major economies.
The central bank also retained its policy stance as neutral, indicating that interest rates are likely to remain stable in the near future. According to the governor, domestic economic indicators suggest that growth is on a firm footing despite uncertainties in the global environment. He expressed confidence that the current momentum could be sustained over a longer period.
While keeping rates unchanged, the RBI has marginally increased its inflation forecast for the current year and the next two quarters. Officials pointed out that price pressures in certain sectors required close monitoring, though overall inflation remained within manageable levels.
In addition to the policy decision, the governor announced several consumer protection measures. A new framework will be introduced to compensate customers for losses of up to twenty five thousand rupees arising from small value digital transaction frauds. Draft guidelines are also being prepared to address issues related to mis selling by lenders, loan recovery practices and the conduct of recovery agents.
Experts believe the cautious approach reflects the central bank’s attempt to balance growth with price stability. With domestic demand showing resilience and external risks gradually easing, the RBI has chosen to observe further developments before considering any change in interest rates.
