RBI keeps Repo Rate intact at 5.25%; Governor says energy crisis can impact growth

The Reserve Bank of India has kept the repo rate unchanged at 5.25 per cent, adopting a cautious “wait and watch” approach amid global economic uncertainty and geopolitical tensions. The decision was taken unanimously by the Monetary Policy Committee (MPC), chaired by RBI Governor Sanjay Malhotra, following its latest policy review meeting.

Announcing the decision, the central bank highlighted that India’s macroeconomic fundamentals remain robust, but emerging global risks—particularly due to rising energy prices and geopolitical tensions—have made the economic outlook more uncertain. The RBI also projected India’s real GDP growth at 6.9 per cent, indicating a moderation in growth amid external pressures.

The central bank noted that inflation remains within the target range but flagged upside risks, especially from food prices due to weather disruptions and high crude oil costs. It emphasized that such uncertainties necessitate caution, with the current policy stance aimed at maintaining stability while closely monitoring evolving conditions.

In addition to the rate decision, the RBI announced measures to ease business operations, including the suspension of certain due-diligence requirements for MSMEs on trade platforms. The move is expected to improve access and encourage participation by smaller enterprises, supporting economic activity.

The decision to hold rates steady is also expected to provide relief to borrowers, particularly homebuyers, as lending rates and EMIs are likely to remain stable. The RBI maintained that its approach will continue to be data-driven, balancing growth and inflation concerns while navigating global uncertainties.