RBI Holds Repo Rate at 5.25%, Raises Growth Forecast and Trims Inflation View

The Reserve Bank of India kept its benchmark repo rate unchanged at 5.25% and retained a neutral policy stance at the conclusion of its August monetary policy review on Wednesday. The Monetary Policy Committee raised its economic growth forecast for the 2026-27 fiscal year to 6.7% from 6.6% and trimmed its consumer price inflation projection to 5% from 5.1%. Governor Sanjay Malhotra said the committee chose to hold because it wanted greater clarity on the inflation outlook before taking further action, pointing to continued global uncertainty stemming from the conflict in West Asia, disrupted trade routes and volatile markets. The standing deposit facility rate was left at 5%, while the marginal standing facility rate and the bank rate remained at 5.5%. The decision underscores a cautious, wait-and-see approach as the central bank balances supporting domestic demand against external risks, particularly from higher energy prices. The MPC's next scheduled meeting is in October. Economists broadly described the stance as prudent and calibrated given the prevailing global environment.