The rate cut pause comes on the back of the CPI-based headline retail inflation ruling below the 2 per cent lower band mandated by the government for the last four months.
The Reserve Bank of India (RBI) on Friday decided to keep the repo rate unchanged at 5.25 per cent. This is the first monetary policy review after Finance Minister Nirmala Sitharaman announced the Budget for the financial year 2026-27. Announcing the sixth and final bi-monthly monetary policy for the current fiscal, RBI Governor Sanjay Malhotra said the Monetary Policy Committee (MPC) has decided to retain the short-term lending rate or repo rate at 5.25 per cent with a neutral stance.
The rate cut pause comes on the back of the CPI-based headline retail inflation ruling below the 2 per cent lower band mandated by the government for the last four months. The central bank has been tasked by the government to ensure that the consumer price index (CPI) based retail inflation remains at 4 per cent with a margin of 2 per cent on either side.
Key Highlights of MPC
- Benchmark lending rates unchanged with repo rate at 5.25 pc;
- Monetary policy stance remains neutral
- GST reforms, monetary easing, low inflation to support pvt consumption
- Trade deals to boost exports
- GDP growth projections revised upwards for Q1 and Q2 of FY27 to 6.9 per cent and 7 per cent, respectively
- Measures in Union Budget conducive for economic growth
- Retail inflation for current fiscal projected at 2.1 per cent
- CPI inflation for Q1 and Q2 of FY27 projected at 4 pc and 4.2 per cent, respectively
- Excluding precious metals, underlying inflation pressures remain muted
- India’s forex reserves stood at USD 723.8 billion
- Framework soon to compensate customers up to Rs 25,000 for losses in frauds
- RBI proposes measures to protect senior citizens from digital frauds
- Collateral-free loan limit for MSMEs to be doubled to Rs 20 lakh
- Banks to be allowed lend to REITs
- Branch opening norms for certain types of NBFCs to be relaxed
- Next meeting of RBI’s MPC scheduled for April 6- 8, 2026.
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