The Reserve Bank of India kept its key policy repo rate unchanged at 5.25 percent, continuing the same level maintained since December 2025. Governor Sanjay Malhotra announced the decision after the Monetary Policy Committee reviewed current economic and financial conditions. The committee unanimously decided to maintain the existing rate. The central bank said it would adopt a cautious approach as global uncertainty rises.
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The Monetary Policy Committee also kept other policy rates unchanged. The standing deposit facility rate remains at 5 percent, while the marginal standing facility rate and bank rate stay at 5.5 percent. The central bank also maintained its neutral policy stance. Officials said this approach allows the RBI to respond flexibly to changing economic conditions.
Strong growth but global conflict keeps RBI on alert
The RBI said rising geopolitical tensions in West Asia influenced its decision to hold rates steady. Policymakers observed that global uncertainty has increased due to the ongoing conflict in the region. The central bank believes sudden global developments could affect inflation and economic stability. Because of this situation, the committee chose to wait before making any policy changes.
The central bank noted that inflation currently remains under control and below the target level. However, it warned that risks are increasing due to higher global energy prices and possible weather-related impacts on food supply. Policymakers said these factors could push prices higher in the coming months. The RBI will closely monitor inflation trends before adjusting rates.
Officials also said core inflation pressures remain relatively muted for now. At the same time, they expressed concern over potential supply chain disruptions and secondary inflation effects. Such disruptions could create uncertainty in the inflation outlook if global tensions continue. Because of these risks, the RBI has decided to adopt a wait-and-watch approach.
The RBI said India’s economic growth continues to show strong momentum supported by consumption and investment activity. High-frequency indicators suggest that economic activity remains stable across several sectors. However, the central bank warned that the conflict in West Asia could raise input costs and disrupt supply chains. These factors may affect industries and overall growth if the situation worsens.
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Despite these challenges, the RBI said the Indian economy remains resilient compared to previous crises. Strong economic fundamentals provide the country with better capacity to absorb global shocks. The central bank said it will keep monitoring economic data and global developments carefully. It also reiterated that policymakers remain ready to take action if conditions change.