RBI Keeps Repo Rate Unchanged at 5.5%; Maintains 'Neutral' Stance in August MPC Policy

Mumbai (The Uttam Hindu): Reserve Bank of India (RBI) Governor Sanjay Malhotra on Wednesday announced the outcomes of the Monetary Policy Committee (MPC) meeting for August, stating that the repo rate will remain unchanged at 5.5%, and the monetary policy stance will continue to be “neutral.”

Governor Malhotra said, “RBI has taken decisive and forward-looking steps to support growth. The MPC voted unanimously to keep the repo rate steady at 5.5%, maintaining a neutral stance.”

This follows a rate cut in June, when the RBI lowered the repo rate by 0.50% from 6.0% to 5.5%. So far in 2025, the central bank has cut the repo rate by a total of 1%, with reductions of 0.25% in February, 0.25% in April, and 0.50% in June. The RBI has retained its GDP growth forecast for the financial year 2025–26 at 6.5%, with quarterly projections as follows:

Q1: 6.5%

Q2: 6.7%

Q3: 6.6%

Q4: 6.3%

For FY 2026–27, Q1 GDP growth is estimated at 6.6%. On the inflation front, the central bank expects headline inflation to average 3.1% in FY 2025–26, with quarterly estimates as follows:

Q2: 2.1%

Q3: 3.1%

Q4: 4.4%

Q1 of FY 2026–27: 4.9%

Malhotra also revealed that as of August 1, India’s foreign exchange reserves stood at approximately ₹57.24 lakh crore, which is equivalent to covering 11 months of imports (based on $688.19 billion converted at ₹83.2/USD). This indicates strong external sector stability.