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. With the repo rate unchanged, the Standing Deposit Facility rate remains at 5 percent, while the Marginal Standing Facility rate and the Bank Rate continue at 5.5 percent. RBI Governor Sanjay Malhotra delivered the decision on Wednesday morning, followed by a press conference at noon. The decision came after the MPC assessed evolving domestic macroeconomic and financial conditions as well as the global outlook, which Malhotra said has been shaped by the continuing conflict in West Asia that has disrupted trade routes and supply chains, increased market volatility, and weakened business sentiment. The RBI raised its FY27 real GDP growth forecast to 6.7 percent from 6.6 percent projected at the June policy review, signaling confidence in the economy's resilience despite external headwinds. Consumer price inflation for the financial year is projected at 5.1 percent. Malhotra said global growth is expected to slow, inflation is projected to remain elevated in 2026, and uncertainty has increased as some central banks have tightened monetary policy while others remain cautious. The unanimous decision to hold rates reflects the MPC's view that inflation risks remain elevated due to imported energy costs and geopolitical uncertainty, even as domestic growth remains solid.