RBI Maintains Repo Rate at 5.25% and Revises FY26 Inflation Outlook to 2.1%
The Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) has unanimously voted to keep the policy repo rate unchanged at 5.25% while maintaining a neutral stance. Governor Sanjay Malhotra noted that while external headwinds have intensified, domestic growth remains resilient. The inflation outlook for FY26 has been revised to 2.1%, though near-term CPI projections for Q1:FY27 and Q2:FY27 are slightly higher at 4% and 4.2% due to rising precious metal prices. Real GDP growth projections for early FY27 have been revised upwards to 6.9% and 7%. The RBI aims to remain proactive in liquidity management to ensure stability.
Key Points
- The Monetary Policy Committee (MPC) kept the repo rate at 5.25% to balance inflation control with economic growth objectives.
- The RBI maintained a neutral stance, indicating flexibility for future rate movements based on evolving macroeconomic data.
- Inflation is expected to remain benign in the long term, though volatility in precious metals and energy prices poses upside risks.
- GDP growth projections for Q1:FY27 and Q2:FY27 were revised upwards to 6.9% and 7.0% respectively based on strong fundamentals.
- The RBI will focus on proactive liquidity management to meet the productive needs of the economy and facilitate policy transmission.
Exam Facts
- The current RBI policy repo rate is 5.25%.
- The projected inflation for FY26 is 2.1%.
- The current RBI Governor is Sanjay Malhotra.
- GDP growth for Q1:FY27 is projected at 6.9% and Q2:FY27 at 7%.
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