RBI MPC Meeting 2026: Central bank keeps repo rate unchanged at 5.25%, maintains neutral stance

Despite strong macroeconomic fundamentals Indian rupee last year depreciated more than the average of previous years. RBI Governor said that India's forex reserve stands healthy at USD 696.1 billion as on April 3.

CPI inflation projected at 4.6 per cent for the current fiscal, said RBI Governor Sanjay Malhotra.

India's retail inflation dropped to a historic low of 0.25 per cent in October 2025, marking the lowest level since the Consumer Price Index (CPI) series was introduced.

"Going forward, elevated energy and other commodity prices as also shocks to the availability of inputs due to disruptions in the Strait of Hormuz, are likely to impact growth this year. The government has been proactive in ensuring the supply of inputs across critical sectors to minimise the impact of supply chain disruptions," said RBI Governor.

RBI projects GDP growth for 2026-27 at 6.9 per cent, compared to 7.6 per cent in the previous fiscal. The RBI Governor said that the recent spike in energy prices has emerged as a risk to inflation, but the food price outlook remains comfortable in the near term. 

Reserve Bank Governor Sanjay Malhotra said heightened uncertainty, precipitated by ongoing conflict, is weighing on the economic outlook. "High-frequency indicators indicate sustained momentum and economic activity," he said.

Real GDP growth for last year is estimated at 7.6 per cent. RBI Governor also said that inflation remained below the target in January and February.

RBI Governor Sanjay Malhotra said that the central bank has maintained the policy stance as ‘Neutral’. The MPC has decided to keep the repo rate unchanged at 5.25 per cent.

Monetary Policy Committee (MPC) has unanimously decided to keep policy repo rate unchanged at 5.25 per cent, said RBI Governor Sanjay Malhotra. 

Experts are of the view that the central bank will retain its current policy-neutral stance in the upcoming review, reflecting a preference to maintain flexibility amid evolving inflation dynamics and global uncertainties.

Meanwhile, the rupee appreciated 50 paise to 92.56 against the US dollar in early trade on Wednesday after US President Donald Trump announced the suspension of military strikes against Iran for two weeks.

According to Yes Bank, the rate-cutting cycle is over as inflation trends higher, INR depreciation pressure bites, and global central banks signal caution on inflation and rate cycle. According to the latest data, retail inflation in the country rose to 3.21 per cent in February from 2.74 per cent in the preceding month.

The government has asked the Reserve Bank of India (RBI) to maintain retail inflation at 4 per cent with a margin of 2 per cent on either side for another five years ending March 2031.

The RBI last reduced the rate by 25 basis points in December, and it maintained the status quo in the last meeting in February. However, it has cut rates by a total of 125 basis points since February 2025, marking its most aggressive easing cycle since 2019.

The war in West Asia has led to oil prices rising and a sharp depreciation of the INR, and its ramifications are likely to be felt across macro variables and financial markets. The fear is that growth will slow in FY27 due to higher oil prices and supply chain disruptions.

The decision of the six-member Monetary Policy Committee (MPC), headed by Reserve Bank of India (RBI) Governor Sanjay Malhotra, will be announced today at around 10 am.