RBI Keeps Repo Rate Unchanged at 5.25% for Third Time

The Reserve Bank of India (RBI) on Wednesday left the benchmark repo rate unchanged at 5.25% for the third consecutive monetary policy review, citing persistent global uncertainties stemming from the ongoing West Asia crisis, elevated energy prices and supply chain disruptions.

Points that sum up the Monetary Policy announcement on August 05, 2026:

•Policy Repo Rate remains unchanged at 5.25%
•Marginal Standing Facility (MSF) & Bank Rate remains at 5.50%
•Standing Deposit Facility (SDF) remains at 5.00%
•Real GDP growth for 2026-27 is projected at…

— ReserveBankOfIndia (@RBI) August 5, 2026

Announcing the third bi-monthly monetary policy of the current financial year, RBI Governor Sanjay Malhotra said the Monetary Policy Committee (MPC) unanimously voted to retain the repo rate while maintaining a neutral policy stance.

The central bank's decision comes despite retail inflation, measured by the Consumer Price Index (CPI), rising to 4.38% in June, exceeding the RBI's medium-term target of 4%.

The RBI, however, expressed confidence in the economy by raising its GDP growth forecast to 6.7% for the current financial year, while lowering the inflation projection to 5%.
Meanwhile, the Indian rupee continues to remain under pressure, trading between ₹95 and ₹96 against the US dollar. Once regarded as one of Asia's most stable currencies, the rupee has emerged among the worst-performing emerging market currencies in 2026.

The currency has weakened by nearly 7% this year and around 6% since the escalation of the Iran conflict in late February, driven by expensive crude oil, capital outflows, a widening trade deficit and continued strength in the US dollar.

The RBI's latest policy reflects its cautious balancing act between supporting economic growth and containing inflation amid heightened global economic and geopolitical uncertainties.