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Informist, Wednesday, Apr. 8, 2026

 

--RBI Malhotra: MPC left repo rate unchanged at 5.25% 

--RBI Malhotra: MPC voted unanimously to leave repo rate unchanged at 5.25% 

--RBI Malhotra: MPC decided to maintain 'neutral' policy stance 

--RBI Malhotra: MSF, Bank rates remain unchanged at 5.50%; SDF rate at 5.00% 

--RBI: Minutes of Apr MPC meeting to be released on Apr 22 

 

MUMBAI – The Reserve Bank of India's Monetary Policy Committee Wednesday left the policy repo rate unchanged at 5.25% in a unanimous decision, Sanjay Malhotra, the central bank's governor, said. Malhotra said the war in West Asia poses risks to India's economy even as the fundamentals remain strong. The committee also retained its 'neutral' policy stance.

 

The rate-setting panel's decision was on expected lines. Most economists and market participants polled by Informist had expected the committee to hold the key interest rate and stance. The committee has lowered the repo rate by 125 bps in 2025, the most in a calendar year since 2019. 

 

"The MPC noted that the intensity and the duration of the conflict in West Asia and the resultant damage to the energy and other infrastructure add risk to the inflation and growth outlooks," the Monetary Policy Committee said in its resolution statement. "However, the fundamentals of the Indian economy are on a stronger footing, providing it with greater resilience to withstand shocks now than in the past." 

 

The committee felt it was prudent to "wait and watch" the changing circumstances and the evolving growth-inflation outlook, Malhotra said. It remains vigilant and is closely monitoring incoming information and assessing the balance of risks, he added. The neutral stance also gave the rate-setting panel the flexibility to "respond judiciously" to incoming information, the RBI governor said.

 

The RBI projected GDP growth in the current financial year at 6.9%, lower than the 7.6% estimated for FY26. The central bank sees CPI inflation averaging 4.6% in FY27, after falling to around 2% in FY26.

 

The US-Israel war on Iran, which started on Feb. 28, has lead to a surge in energy prices and disrupted global supplies. The US and Iran early Wednesday agreed to a two-week ceasefire. Iran has agreed to reopen the Strait of Hormuz, through which a large chunk of global crude oil passes, for two weeks.

 

"Going forward, elevated energy and other commodity prices, as also shocks to availability of inputs due to disruptions in the Strait of Hormuz are likely to impact growth in 2026-27," Malhotra said. "Turning to the inflation outlook, recent spikes in energy prices due to the conflict have emerged as a risk."

 

With the repo rate left unchanged at 5.25%, the Standing Deposit Facility remains at 5.00% and the Marginal Standing Facility and bank rate at 5.50%. Minutes of the MPC's April meeting will be published on Apr. 22. The next meeting of the MPC is scheduled for Jun. 3-5.  End

 

Reported by Shubham Rana

Edited by Avishek Dutta

 

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