RBI Keeps Repo Rate Unchanged at 5.25 PC, Retains Neutral Policy Stance

Mumbai, June 5 (BNP): The Reserve Bank of India (RBI) on Friday decided to keep the benchmark repo rate unchanged at 5.25 per cent, maintaining its neutral monetary policy stance amid evolving domestic and global economic conditions.

The decision was announced following the meeting of the Monetary Policy Committee (MPC), which reviewed key economic indicators including inflation, growth prospects, liquidity conditions, and global market developments.

By retaining the repo rate at 5.25 per cent, the RBI signalled a balanced approach aimed at supporting economic growth while ensuring that inflation remains within the targeted range. The central bank’s neutral stance provides flexibility to respond to future economic developments based on incoming data.

The RBI noted that the Indian economy continues to demonstrate resilience, supported by robust domestic demand, stable macroeconomic fundamentals, and ongoing policy reforms. At the same time, the central bank highlighted the need to remain vigilant against potential risks arising from global uncertainties, commodity price fluctuations, and geopolitical developments.

Economists believe the decision will provide stability to financial markets and lending institutions while offering relief to borrowers, as lending rates linked to the repo rate are unlikely to witness immediate changes.

The central bank reiterated its commitment to maintaining price stability while fostering sustainable economic growth. It also emphasized continued monitoring of inflation trends and liquidity conditions to ensure macroeconomic stability.

The RBI’s decision comes at a time when major global central banks are carefully balancing inflation control with growth concerns, making policy predictability an important factor for investors and businesses alike.