Monetary Policy Committee Keeps Repo Rate Unchanged
The Monetary Policy Committee (MPC) of the Reserve Bank of India voted unanimously to maintain the policy repo rate under the liquidity adjustment facility at 5.25 per cent during its sixty-second meeting. Consequently, the standing deposit facility rate stays at 5.00 per cent, while the marginal standing facility rate and the Bank Rate remain at 5.50 per cent. The panel also decided to continue with a neutral stance to respond appropriately to evolving macroeconomic developments.
Domestic Growth and Inflation Outlook
India’s economy has demonstrated resilience against persisting global headwinds. Real GDP growth for the financial year 2026-27 is projected at 6.7 per cent, with private consumption and investment remaining robust. High-frequency indicators reflect steady domestic demand supported by construction, capital goods, and strong bank credit flows. On the external front, services exports have expanded healthily alongside a rebound in merchandise exports.
Headline consumer price index (CPI) inflation edged up to 4.4 per cent in June 2026, driven largely by higher food and fuel costs. However, core inflation remained unchanged at 3.9 per cent during May and June, indicating that price pressures have not become broad-based. Full-year CPI inflation for 2026-27 is projected at 5.0 per cent.
Key Risks and External Uncertainties
The MPC highlighted several risk factors clouding the global and domestic horizon, requiring a cautious watch before any further policy action:
- Persistent geopolitical conflicts and volatile global energy prices
- Deficient and uneven south-west monsoon conditions linked to El Niño
- International trade policy shifts and ongoing foreign tariff investigations
The panel emphasized that while growth remains robust, international uncertainties and supply-side pressures necessitate a careful monitoring of inflation trajectories. The next meeting of the MPC is scheduled for October 5 to 7, 2026.
Primary source: This independent news summary is based on official information from Reserve Bank of India. Read the original document for complete details.