RBI Maintains Repo Rate at 5.25% Amid Global Challenges
Synopsis
In a latest move, the Reserve Bank of India has opted to keep the repo rate steady at 5.25%. This decision comes in the face of global uncertainties and evolving economic indicators, highlighting the delicate balance the RBI seeks to maintain.
Key Takeaways
Repo Rate: Kept at 5.25%.
Inflation: Eased since last review.
Growth Drivers: Strong private consumption and investment.
Global Risks: Elevated crude oil prices and geopolitical uncertainties.
Business Sentiment: Remains optimistic.
New Delhi, April 8 (NationPress) The Reserve Bank of India (RBI) decided on Wednesday to maintain the repo rate at 5.25 percent, preserving the existing rate during its recent Monetary Policy Committee (MPC) meeting.
The Standing Deposit Facility (SDF) rate remains steady at 5 percent, while the Marginal Standing Facility (MSF) rate is held at 5.50 percent, as stated by RBI Governor Sanjay Malhotra upon announcing the MPC's decision.
Governor Malhotra referred to 2025 as a year filled with challenges, yet he acknowledged that inflation has moderated since the October policy revisions. He pointed to enhanced efficiency in the banking sector as a crucial factor supporting the economy.
“High-frequency indicators until February show persistent strength in economic activity,” Malhotra mentioned.
He emphasized that growth is primarily fueled by robust private consumption along with stable investment demand.
“The growth momentum is backed by strong private spending and ongoing investment demand,” Malhotra added. Urban consumption is expected to gain traction further, bolstered by the positive effects of GST rationalization and a thriving services sector.
Nonetheless, the MPC expressed concerns about global uncertainties. “The intensity and length of the conflict, alongside potential damage to energy and infrastructure, present risks to both inflation and growth projections,” noted the Governor.
He also warned that high crude oil prices could intensify macroeconomic challenges. “Elevated crude oil prices could lead to increased imported inflation and expand the current account deficit,” Malhotra elaborated.
Furthermore, he cautioned that subdued global growth forecasts might impact external demand and decrease remittance flows. He stated that according to the updated GDP data, real GDP growth for the previous year stands at 7.6 percent.
Malhotra mentioned that possible disruptions in the Strait of Hormuz could negatively impact growth in the current year.
He added that the government has proactively acted to ensure the supply of essential inputs across vital sectors, assisting in mitigating supply chain disruptions. The Governor also remarked that business sentiment continues to remain positive.
Point of View
The RBI's decision to hold the repo rate indicates a cautious approach in light of global uncertainties. It reflects the need for stability in the economy while balancing inflationary pressures and growth prospects.
NationPress
20 Jun 2026
Frequently Asked Questions
What is the current repo rate set by RBI?
The current repo rate set by the Reserve Bank of India is 5.25%.
Why did the RBI decide to maintain the repo rate?
The RBI maintained the repo rate to ensure economic stability amid global uncertainties and evolving inflation trends.
What are the risks mentioned by RBI Governor Malhotra?
Governor Malhotra highlighted risks such as elevated crude oil prices and potential global growth slowdowns affecting inflation and external demand.
How has inflation changed since the last policy review?
Inflation has eased since the October policy review, according to RBI Governor Malhotra.
What are the projected GDP growth figures?
The real GDP growth for the previous year is pegged at 7.6% under the revised GDP series.
