MUMBAI:The Reserve Bank of India (RBI) on Wednesday kept the policy repo rate unchanged at 5.25 per cent for the fourth consecutive monetary policy review, extending an eight-month pause after the last rate cut in December 2025.
The six-member Monetary Policy Committee (MPC), which met from August 3 to 5, unanimously voted to retain the policy rate and continue with its neutral monetary policy stance amid heightened global uncertainty arising from the continuing conflict in West Asia.
With the repo rate unchanged, the Standing Deposit Facility (SDF) rate remains at 5 per cent, while the Marginal Standing Facility (MSF) rate and the Bank Rate continue at 5.5 per cent.
Announcing the decision, RBI Governor Sanjay Malhotra said the MPC had assessed evolving domestic macroeconomic and financial conditions along with the global outlook before deciding to maintain the status quo.
He said the continuing conflict in West Asia had disrupted trade routes and supply chains, increased financial market volatility and weakened business sentiment.
Global growth is expected to moderate, inflation is projected to remain elevated during 2026 and uncertainty has increased as central banks across the world have adopted differing policy responses, he added.
The decision suggests that the RBI is in no hurry to resume monetary easing after reducing the repo rate by a cumulative 100 basis points during 2025.
With the policy rate remaining unchanged since December, borrowing costs, including home loan rates, are expected to remain broadly stable unless individual banks revise their lending rates independently.
