New Delhi, April 8: The Reserve Bank of India (RBI) has decided to keep the repo rate unchanged at 5.25% during its first monetary policy review for the fiscal year 2026-27. This decision aligns with market expectations and was unanimously approved by the six-member Monetary Policy Committee (MPC) after two days of discussions. The RBI aims to maintain economic stability amid ongoing global uncertainties.
RBI Governor Sanjay Malhotra announced that the bank rate and the Marginal Standing Facility (MSF) rate remain at 5.50%, while the Standing Deposit Facility (SDF) rate is also held steady at 5.00%. This decision comes at a time when global economic conditions continue to pose challenges.
Malhotra described 2025 as a challenging year but noted a decline in inflation since the October policy review. He highlighted the improved efficiency of the banking system as a significant support for the economy.
Notably, this announcement followed just hours after U.S. President Donald Trump declared a two-week ceasefire with Iran. This development created a positive atmosphere in global markets, leading to a surge in the Indian stock market.
The RBI Governor projected India’s real GDP growth rate at 6.9% for the current fiscal year. However, he cautioned that global economic uncertainties, particularly rising tensions in West Asia and high crude oil prices, could exert pressure on India’s growth rate. He clarified that external factors remain a significant risk to India’s economic momentum.
Malhotra also stated that the global economy is currently facing unprecedented challenges. Supply-side constraints and surging energy prices pose risks of renewed inflation. Nevertheless, he expressed confidence in India’s strong economic foundation, asserting that the country’s macroeconomic situation is more stable and capable than before.
The Monetary Policy Committee indicated that while inflation is currently under control, there are risks of increases. Uncertainty in weather patterns could lead to spikes in food prices, while high crude oil prices could widen the current account deficit. Therefore, the RBI has opted for a ‘wait and watch’ strategy to monitor the situation.
The RBI believes that assessing the current conditions is a more prudent approach than hastily changing interest rates. The central bank has adopted a balanced stance, aiming to control inflation while supporting economic growth.
My name is Himanshu Tiwari. I am an experienced content writer with several years of expertise in the field. Currently, I contribute to Daily Kiran, creating engaging and informative content across a variety of categories including TECHNOLOGY, health, travel, education, and automobiles. My goal is to deliver accurate, insightful, and captivating information through my words to help readers stay informed and empowered.
Leave a Comment