RBI Holds Repo Rate at 5.25% to Support Steady Growth Amid Inflation Concerns

RBI keeps repo rate at 5.25%, unchanged from the last meeting, signaling steady monetary policy. This decision marks the first bi‑monthly statement for FY26-27, reflecting the bank’s cautious stance amid global uncertainties.

Governor Sanjay Malhotra said the decision supports medium‑term growth while keeping inflation near the 4% target, citing stable core inflation and resilient consumer spending. He emphasized the need to maintain policy flexibility.

GDP growth projected at 6.9% for FY26, with higher inflation expected. The bank foresees a ‘Goldilocks’ economy in FY27, balancing growth and price stability, and plans to adjust policy if inflation deviates from the target.

Market impact: Banks see a modest lift in borrowing costs, while investors note the unchanged rate may temper bond yields and support equity markets. The decision signals confidence in the economy and could influence corporate borrowing plans.