Reserve Bank of India Holds Repo Rate at 5.25% While Raising Growth Forecast

RBI kept the repo rate unchanged at 5.25% in its latest monetary policy meeting, noting inflation stayed near the 4‑4.5% target, while raising the FY27 real GDP growth outlook to 6.7% and trimming the inflation forecast.

Liquidity surplus hit a record ₹10.5 trillion after unprecedented diaspora remittance flows, providing banks with ample cash, easing short‑term funding strains and allowing lenders to maintain current loan‑to‑value ratios.

Cash withdrawal auction recorded banks parking ₹3.53 lakh crore in a 30‑day window, a modest rise from the previous week’s ₹3.4 lakh crore, indicating tepid demand for overnight funds despite abundant liquidity.

Analysts such as Citi’s Samiran Chakraborty warn that rising price pressures could push the RBI to raise rates by October, which would increase home‑loan EMIs and corporate borrowing costs, while Governor Sanjay Malhotra confirmed the FCNR(B) scheme will continue unchanged.