RBI keeps repo rate unchanged, loan interest rates to remain stable; economy in strong position

Mumbai (The Uttam Hindu): The Reserve Bank of India (RBI) has decided not to make any changes to the repo rate in its latest policy review. RBI Governor Sanjay Malhotra announced on Friday that the repo rate will remain unchanged at 5.25 percent. As a result of this decision, loan interest rates are expected to stay stable, offering no immediate relief to borrowers.

The Monetary Policy Committee (MPC) has maintained a neutral stance, indicating that the central bank is open to adjusting interest rates in the future if economic conditions require it. Governor Malhotra said that the trade agreement with the United States is expected to significantly boost India’s exports.

Apart from the repo rate, the RBI has also kept other key policy rates unchanged. The Standing Deposit Facility (SDF) remains at 5 percent, while the Marginal Standing Facility (MSF) has been retained at 5.50 percent. The RBI Governor stated that India continues to be a preferred destination for foreign direct investment (FDI) and emphasized that the country’s economic growth remains strong. According to the central bank, India’s real GDP growth is on track at 7.4 percent.

On inflation, Governor Malhotra said price levels remain within a controlled range. Retail inflation for the financial year 2026 has increased slightly from 2 percent to 2.1 percent. The RBI has revised its inflation forecast for the fourth quarter of the current financial year from 2.9 percent to 3.2 percent. For the first quarter of FY 2027, the inflation estimate has been raised from 3.9 percent to 4 percent, while the projection for the second quarter has been increased from 4 percent to 4.2 percent.