New Delhi: The Reserve Bank of India (RBI), under the leadership of Governor Sanjay Malhotra, has decided to keep the repo rate unchanged at 5.25%, signaling a cautious approach amid mixed economic signals. The decision was taken during the latest meeting of the Monetary Policy Committee (MPC) and reflects the central bank’s effort to strike a balance between controlling inflation and supporting economic growth.
Alongside the status quo on interest rates, the MPC also chose to maintain a “neutral” policy stance, indicating flexibility in future actions depending on evolving macroeconomic conditions. This move comes after a rate cut announced in December, following which the RBI is closely monitoring inflation trends and growth momentum.
Governor Malhotra stated that while inflation has shown signs of moderation, it continues to face risks from global uncertainties, commodity price volatility, and supply-side pressures. At the same time, domestic economic growth remains resilient, supported by steady consumption demand and ongoing public infrastructure spending.
“The committee believes that maintaining the current policy rate is appropriate to ensure that inflation continues to move toward the target while safeguarding growth,” the RBI said in its policy statement.
The central bank reiterated its commitment to keeping inflation within the medium-term target range, while ensuring adequate liquidity in the system to support productive sectors of the economy. Analysts believe the neutral stance gives the RBI room to either tighten or ease policy in the coming months, depending on inflation data and global financial developments.
Market participants are expected to closely track upcoming inflation readings, crude oil prices, and global central bank actions, particularly those of the U.S. Federal Reserve, which could influence the RBI’s future policy decisions.
This is a developing story, and further details are awaited as the RBI releases its full economic outlook and projections.