RBI Keeps Repo Rate Steady At 5.5%, Maintains Neutral Stance Amid Global Uncertainty

The Reserve Bank of India (RBI) has kept the key repo rate unchanged at 5.5%, as expected, following its latest monetary policy review. Announcing the decision on Wednesday, RBI Governor Sanjay Malhotra said the Monetary Policy Committee (MPC) voted unanimously to hold the rate steady, maintaining a “neutral” policy stance.

The decision comes after the MPC had cut the repo rate by 50 basis points in June, citing easing inflation. The committee, which met over three days from August 4 to 6, opted to pause this time to assess the effects of recent cuts against the backdrop of ongoing global trade uncertainties and mixed domestic signals.

“After a detailed assessment of the evolving macroeconomic and financial developments and outlook, the MPC voted unanimously to keep the policy repo rate under the Liquidity Adjustment Facility unchanged at 5.5 per cent,” said Malhotra.

He noted that inflation, both in the near and medium term, is now within the central bank’s comfort zone. Food inflation, in particular, has remained soft, giving the RBI greater policy flexibility. The central bank has revised its inflation forecast for FY26 downward to 3.1%, from an earlier projection of 3.7%, indicating easing price pressures.

On the growth front, the RBI has retained its GDP forecast for FY26 at 6.5%. Governor Malhotra said rural consumption continues to show resilience, and the services sector remains buoyant. However, he acknowledged that growth in the industrial sector remains subdued.

With inflation stabilizing and growth concerns persisting in some areas, the RBI is expected to continue closely monitoring both global and domestic developments before making further policy moves.