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The Reserve Bank of India on Wednesday announced that it will keep the repo rate unchanged at 5.25% amid the ongoing Middle East conflict. This followed the three-day monetary policy committee meeting, which aimed to stay cautious as inflation has started moving up again. The six-member Monetary Policy Committee, led by Governor Sanjay Malhotra, unanimously voted for it. Further, the panel retained the monetary policy stance as ‘neutral,’ indicating that future decisions will also become data-driven.
Additionally, the RBI kept the Standing Deposit Facility (SDF) rate at 5% and the Marginal Standing Facility (MSF) rate and the bank rate unchanged at 5.5%. After the decisions were announced, the RBI Governor mentioned, “Crude oil prices, currencies, and financial markets remain volatile, fluctuating in line with the changing intensity and uncertainties of the West Asia conflict. In this backdrop, the Monetary Policy Committee met for its third bi-monthly meeting of this financial year, on 3rd, 4th, and 5th, that is today, to deliberate and decide on the policy reparation.”
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The central bank last changed the repo rate in December 2025, lowering it to 5.25% from the previous 5.50%. Since then, RBI has kept the repo rate unchanged.
The repo rate is the interest rate at which the RBI lends money to commercial banks. It directly affects loan and deposit rates across the country. By keeping it steady, the RBI hopes to prevent inflation from rising further without putting too much pressure on economic activity.
The RBI's latest decision shows it is taking a careful approach. Instead of rushing into another rate cut, the central bank has chosen to wait for more economic data. This gives it room to respond if inflation rises further or growth begins to slow in the coming months.
