Mumbai, 05 August (H.S.):

The Reserve Bank of India (RBI) has once again left the policy repo rate unchanged, maintaining it at 5.25 percent. RBI Governor Sanjay Malhotra announced the decision on Wednesday following the Monetary Policy Committee's (MPC) three-day bi-monthly policy review meeting. With the repo rate remaining unchanged, lending rates on loans are also expected to remain stable. The central bank, however, lowered its retail inflation forecast to 5.0 percent while raising its GDP growth projection for the current financial year to 6.7 percent.

Announcing the MPC's decisions, Governor Malhotra said the committee had unanimously voted to retain the policy repo rate at 5.25 percent during the third monetary policy review of the financial year 2026-27. He added that the MPC also decided to maintain its neutral policy stance.

Malhotra said India continues to be the world's fastest-growing major economy, supported by strong domestic demand. He noted that the ongoing geopolitical tensions in West Asia continue to disrupt key global trade routes, posing challenges to the global economy.

The RBI Governor said retail inflation is expected to rise in the near term, peak during the third quarter, and then gradually moderate thereafter.

The RBI has revised its retail inflation forecast for FY 2026-27 downward from 5.1 percent to 5.0 percent. Referring to domestic economic performance, Malhotra said the Indian economy performed better than expected during the April-June quarter of the current financial year.

He further announced that the RBI has raised its GDP growth forecast for FY 2026-27 from 6.6 percent to 6.7 percent, reflecting stronger-than-anticipated economic momentum.

Notably, the RBI had also kept the repo rate unchanged at 5.25 percent during its second monetary policy review held in June. The central bank is scheduled to hold six MPC meetings during the current financial year, with this being the third review. The first policy review was conducted in April.

Since February 2025, the RBI has cumulatively reduced the policy repo rate by 125 basis points, bringing it down to the current level of 5.25 percent.

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Hindusthan Samachar / Jun Sarkar