Daijiworld Media Network – Mumbai
Mumbai, Apr 8: The Reserve Bank of India (RBI) on Wednesday kept the repo rate unchanged at 5.25 per cent, opting for a cautious approach amid rising global uncertainty linked to the West Asia conflict.
Announcing the decision, RBI Governor Sanjay Malhotra said the Monetary Policy Committee (MPC) unanimously voted to maintain the current policy rate after assessing evolving macroeconomic and financial conditions.
“The MPC noted that since the last policy meeting, geopolitical uncertainties have heightened significantly,” he said.
The repo rate has remained unchanged since December 2025. Alongside this, the standing deposit facility (SDF) rate continues at 5 per cent, while the marginal standing facility (MSF) rate and bank rate remain at 5.5 per cent. The RBI also retained its neutral policy stance.
The central bank noted that while headline inflation remains below target levels, risks are increasing due to rising energy prices and possible weather-related disruptions to food supply.
“Headline inflation remains contained and below the target. However, upside risks to the inflation outlook have increased,” the Governor said.
Core inflation pressures were described as muted, though concerns persist over supply chain disruptions and potential second-round effects, making the future trajectory uncertain.
On the growth front, the RBI said economic momentum remains strong, supported by consumption and investment.
“High-frequency indicators suggest the continuation of strong momentum in economic activity,” Malhotra said.
However, he cautioned that the ongoing conflict could impact growth through higher input costs and disruptions in supply chains.
The RBI flagged several risks arising from the geopolitical situation, including elevated crude oil prices that could fuel imported inflation and widen the current account deficit.
It also warned that disruptions in energy and commodity markets could affect industries and agriculture, while global uncertainty may weigh on investment and consumption.
Despite these concerns, the Governor emphasised that India’s economic fundamentals remain strong and resilient compared to previous crises.
The RBI reiterated that it will closely monitor incoming data and remain prepared to act if required.
“The MPC remains vigilant, closely monitoring incoming information and assessing the balance of risks,” Malhotra said.
For now, the central bank has adopted a wait-and-watch approach, keeping rates steady while assessing how global and domestic conditions evolve.