The Reserve Bank of India (RBI) has kept the benchmark repo rate unchanged at 5.25 percent, signalling policy continuity even as global uncertainties cloud the outlook.
Announcing the decision after the April 6–8 monetary policy meeting, RBI Governor Sanjay Malhotra said the Monetary Policy Committee (MPC) has also retained its ‘neutral’ stance, allowing flexibility to respond to evolving macroeconomic conditions.
This is the first policy review for FY27 and follows a cumulative 125 basis points rate cut delivered during 2025, after which the central bank has stayed on pause.
Along with the repo rate, other key policy rates were left unchanged:
Standing Deposit Facility (SDF): 5 percent
Marginal Standing Facility (MSF): 5.5 percent
Bank rate: 5.5 percent
The policy decision comes against the backdrop of rising geopolitical tensions in West Asia, which have pushed up crude oil prices and weighed on the rupee.
The RBI flagged risks to external demand, noting that disruptions in key shipping routes, along with higher freight and insurance costs, could impact merchandise exports. However, recently signed trade agreements and resilient services exports are expected to provide some cushion.
The central bank has projected India’s real GDP growth for FY27 at 6.9 percent, indicating stable economic momentum despite global headwinds.
Quarter-wise projections are:
Q1: 6.8 percent
Q2: 6.7 percent
Q3: 7.0 percent
Q4: 7.2 percent
The RBI has pegged CPI inflation for FY27 at 4.6 percent, with risks tilted upwards due to global factors.
Rising energy prices remain a key concern, though domestic fuel prices have not yet reflected the spike. On the positive side, food inflation is expected to remain contained in the near term, supported by strong rabi output, adequate reservoir levels and sufficient buffer stocks.
Quarterly inflation estimates are:
Q1: 4.0 percent
Q2: 4.4 percent
Q3: 5.2 percent
Q4: 4.7 percent
With inflation risks lingering and growth holding steady, the RBI’s decision to maintain status quo underscores a calibrated approach—prioritising stability while retaining room to act if global conditions worsen.
