RBI keeps repo rate unchanged at 5.5%

The Reserve Bank of India (RBI) on Wednesday decided to keep the key repo rate unchanged at 5.5%, as the Monetary Policy Committee (MPC) concluded its three-day meeting led by Governor Sanjay Malhotra. He also kept the GDP growth projection for the current financial year 2025-26 unchanged at 6.5 percent.

"The Monetary Policy Committee, MPC, met on the 4th, 5th, and 6th of August to deliberate and decide on the policy repo rate. After a detailed assessment of the evolving macroeconomic and financial developments and the outlook, the MPC voted unanimously to keep the policy repo rate under the Liquidity Adjustment Facility unchanged at 5.5%," said RBI Governor Sanjay Malhotra.

He further said that the Standing Deposit Facility rate will remain at 5.25%, and the Marginal Standing Facility rate and the Bank Rate will continue at 5.75%. "The MPC also decided to continue with a neutral stance," he added.

Governor Malhotra explained the reason behind keeping rates unchanged, pointing to the movement in inflation numbers over recent months. The RBI has been closely watching inflation trends, particularly food prices, which have been unpredictable in recent months. While the central bank is relieved by the overall cooling in inflation, there are still concerns that it might rise again toward the end of the year.

On the economic growth front, the Governor said that India’s growth remains strong but not quite at the level the central bank had earlier hoped for. He explained that the full impact of the 100 basis points cut in the repo rate since February is still being felt.

GDP Growth

Despite the uncertain global trade environment due to ongoing tariff announcements and trade negotiations, the RBI kept the GDP growth projection for the current financial year 2025-26 unchanged at 6.5 percent.

“The Indian economy holds bright prospects in the changing world order, drawing on its inherent strengths," the RBI Governor said. “Prospects of external demand, however, remain uncertain amidst ongoing tariff announcements and trade negotiations. Taking all these factors into account, real GDP growth for 2025-26, the current year, is projected at 6.5 percent, our earlier projection," he added.