RBI Maintains Status Quo On Policy Rate At 5.25%, GDP May Grow By 6.9% In FY27

The Monetary Policy Committee of the Reserve Bank of India (RBI) on Wednesday unanimously decided to keep the repo rate unchanged at 5.25 percent amid West Asia getting a relief of two weeks.

It also kept the policy stance as ‘neutral’. For FY27, the GDP growth estimate is set at 6.9 percent, while the economy is estimated to have grown by 7.6 percent in FY26, RBI Governor Sanjay Malhotra stated.

However, he said that it was prudent to wait and watch, as the uncertainty induced by the conflict may weigh on the economic outlook.

“After a detailed assessment of the evolving macroeconomic and financial developments and the outlook, the MPC voted unanimously to keep the policy repo rate unchanged under the liquidity facility at 5.25 percent. Consequently, the SDR rate remains at 5 percent and the MSF rate and the bank rate at 5.5 percent,” the Governor said.

He said that global and domestic growth was at risk due to the sharp rise in energy prices, but the Indian economy stands on strong fundamentals.

“Global growth faces increasing downside risks due to the sharp rise in energy prices, although we saw a correction today,” he said, indicating the fall in crude oil prices after the United States and Iran agreed to a two-week ceasefire and a conditional opening of the Strait of Hormuz.

Yet, the banking regulator has not lowered its guard due to continued uncertainty.

“Shortages of inputs for various industries have stoked inflation fears and pushed up the geopolitical risk premium in the oil market,” Malhotra said in his speech after the conclusion of the first policy meet of the new financial year.