RBI Policy Update: Repo Rate at 5.25%, Inflation and Oil Prices in Focus

The Reserve Bank of India on Wednesday kept the repo rate unchanged at 5.25 per cent, with Governor Sanjay Malhotra saying it is "Prudent To Wait And Watch".

In line with market expectations, RBI Governor Sanjay Malhotra kept the repo rate unchanged at 5.25 per cent. The decision, taken unanimously, comes after the six-member monetary policy committee held deliberations for two days. Follow Live Updates

Significantly, the repo rate announcement comes hours after US President Donald Trump announced a "double-sided ceasefire" with Iran. The two-week truce triggered a rally in global markets. Indian benchmark indices also witnessed a gap-up opening.

The monetary policy committee, chaired by the RBI Governor, meets every two months to review key economic indicators and determine the policy stance. The central bank kept the rate unchanged in the August, October and February 2026 monetary policies.

Meanwhile, in a significant development, RBI suspended due-diligence requirement for MSMEs for inclusion in various trade platforms to promote ease of doing business, said Govenor Malhotra.

RBI MPC Meeting: Here's What RBI Governor Sanjay Malhotra Said:-

India's macro-economic fundamentals robust; situations turned challenging in March due to the Iran war.

Global growth faces risks due to the rise in energy prices.

Uncertainty due to the conflict weighs on economy outlook.

Equities registered a board-based correction.

RBI projects FY27 Real GDP growth to ease to 6.9 per cent amid war risks. Here are quarter-wise projections: Q1 at 6.8%, Q2 at 6.7%, Q3 at 7%, and Q4 at 7.2%.

India's forex reserves are healthy at $697.1 billion.

India's merchandise exports contracted by 0.2% (year-on-year basis) during the first two months of this year.

The STF rate remains at 5% and the MSF rate and the bank rate at 5.5%

Rationale Behind Repo Rate Decision

Headline inflation remains contained and below central bank's target of 4 per cent, but there's upside risk.

Risks of food prices rising due to weather disturbances.

Prudent to wait and watch in such scenario.

High crude prices may widen current account deficit.

Disruptions in Hormuz likely to impact growth this year.