Reserve Bank of India (RBI) Governor Sanjay Malhotra said that the Monetary Policy Committee (MPC) unanimously decided to keep the policy repo rate unchanged at 5.50 per cent after a 100 basis points (bps) rate cut earlier during the year. The RBI Governor stated that the MPC has decided to maintain a neutral stance. The central bank reduced the repo rate by 25 basis points (bps) each in February and April, and 50 bps in June.
"Over the medium term, the Indian economy holds bright prospects in the changing world order, drawing on its inherent strengths..." the Governor said.
Inflation Forecast
With regard to the inflation forecast, the governor lowered the projection to 3.1 per cent from the earlier estimate of 3.7 per cent for the current financial year.
He also said that the good monsoon and the upcoming festive season were expected to spur economic activity.
Malhotra said that the Indian economy was expected to post robust growth in the medium term amid the global trade uncertainty, backed by supportive policies of the Government and the RBI.
CPI Headline Inflation Declines
The RBI Governor said that the Consumer Price Index (CPI) headline inflation declined for the eighth consecutive month to a 77-month low of 2.1 per cent (y-o-y) in June 2025. Also, food inflation recorded its first negative print since February 2019 at - 0.2 per cent in June.
RBI Monetary Policy Full Statement
https://getapi.indiatvnews.com/doc/rbi.pdf
The six-member panel, headed by Governor Malhotra, started the three-day deliberation on the monetary policy on Monday.
The government has tasked the RBI to ensure that consumer price index (CPI) based retail inflation remains at 4 per cent with a margin of 2 per cent on either side.
Since February this year, the retail inflation has been trending below 4 per cent.
The MPC consists of three RBI officials - Sanjay Malhotra (Governor), Poonam Gupta (Deputy Governor), Rajiv Ranjan (Executive Director) and three external members - Nagesh Kumar (Director and Chief Executive, Institute for Studies in Industrial Development, New Delhi), Saugata Bhattacharya (Economist), Ram Singh (Director, Delhi School of Economics).
