RBI's MPC maintains repo rate at 5.5% and projects GDP growth at 6.5% for 2025-26
The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) voted to maintain the policy repo rate at 5.50% and a neutral stance, aiming for 4% CPI inflation within a +/- 2% band while supporting growth. Consequently, the standing deposit facility (SDF) rate remains at 5.25% and the marginal standing facility (MSF) rate at 5.75%. Despite global challenges like prolonged geopolitical tensions and market volatility, domestic growth remains resilient. The MPC projected real GDP growth for 2025-26 at 6.5% and CPI inflation for 2025-26 at 3.1%, with risks evenly balanced.
Key Points
- The RBI's Monetary Policy Committee (MPC) decided to keep the policy repo rate unchanged at 5.50%.
- The decision maintains a neutral stance, targeting CPI inflation at 4% (+/- 2%) while supporting economic growth.
- The Standing Deposit Facility (SDF) rate is 5.25%, and the Marginal Standing Facility (MSF) rate is 5.75%.
- Despite global headwinds, India's domestic growth is resilient, with real GDP growth projected at 6.5% for 2025-26.
- CPI headline inflation declined to a 77-month low of 2.1% in June 2025, with the inflation outlook for 2025-26 projected at 3.1%.
Exam Facts
- Policy repo rate: 5.50%.
- Standing Deposit Facility (SDF) rate: 5.25%.
- Marginal Standing Facility (MSF) rate and Bank Rate: 5.75%.
- Real GDP growth projection for 2025-26: 6.5%.
- CPI inflation target: 4% (+/- 2%), with projection for 2025-26 at 3.1%.
- RBI Governor: Sanjay Malhotra.
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