RBI Holds Repo Rate Unchanged at 5.25% Unanimously, Retains Neutral Stance; Raises FY27 GDP Growth Forecast to 6.7%

The Reserve Bank of India's Monetary Policy Committee unanimously voted to keep the policy repo rate unchanged at 5.25 percent at its August 3-5 meeting, maintaining the rate at the level reached after cumulative cuts of 125 basis points in 2025. The committee also retained its neutral policy stance, citing global uncertainty and volatility linked to the continuing conflict in West Asia. With the repo rate unchanged, the Standing Deposit Facility rate remains at 5.0 percent, while the Marginal Standing Facility rate and the Bank Rate continue at 5.5 percent. RBI Governor Sanjay Malhotra announced the decision at 10:00 am on August 5, noting that the MPC had assessed evolving domestic macroeconomic and financial conditions as well as the global outlook. The continuing West Asia conflict has disrupted trade routes and supply chains, increased market volatility, and weakened business sentiment, he said. The committee raised its FY27 GDP growth forecast to 6.7 percent, up from earlier projections, reflecting confidence in India's domestic demand resilience despite external headwinds. The decision keeps borrowing costs stable for consumers and businesses, with home loan EMIs and corporate lending rates unchanged. The next MPC meeting is scheduled for October 2026. Indian equity markets responded positively, with the Sensex opening 626 points higher at 79,055 and the Nifty at 24,669 on August 5, buoyed by the stable rate environment and a sharp drop in Brent crude oil prices to below $80 per barrel.