MPC unanimously maintains status quo amid stable inflation, festive demand expectations

RBI Holds Repo Rate at 5.5% Retains Neutral Stance

The Reserve Bank of India (RBI) has decided to keep the repo rate unchanged at 5.5%, continuing with its neutral monetary policy stance, RBI Governor Sanjay Malhotra announced on Wednesday. The decision was unanimously taken by the Monetary Policy Committee (MPC) after evaluating inflation, growth, and global economic trends.
A neutral stance indicates that the central bank aims to strike a balance between curbing inflation and supporting economic growth, neither tightening nor easing liquidity excessively.
Governor Malhotra noted that core inflation remains stable at around 4%, though food prices, especially vegetables, show volatility. A favourable monsoon and the upcoming festive season are expected to boost consumption and economic activity.
Despite global economic uncertainty and rising international inflation, the RBI expects robust medium-term growth in India, supported by pro-growth government and RBI policies.
This decision follows the June 6 announcement where the RBI cut the repo rate by 50 basis points, bringing it down from 6% to 5.5%, and slashed the Cash Reserve Ratio (CRR) by 100 basis points to enhance liquidity.
So far in 2025, the repo rate has been cut by 100 basis points, aimed at reducing borrowing costs and stimulating investments. However, the Governor emphasised the importance of effective transmission by commercial banks to ensure lower rates reach consumers and businesses.
Malhotra reiterated the RBI's dual focus on controlling inflation while accelerating the monetary easing cycle to support sustainable growth.
[Except for the headline, this article has not been edited by the Benefit News editorial team and is published directly from the IANS news feed.]
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6 ઑગસ્ટ, 2025 | 15:02 IST

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