RBI Holds Repo Rate at 5.25% and Lifts FY27 Growth Forecast to 6.7%

The Reserve Bank of India kept its benchmark repo rate unchanged at 5.25% at its August monetary policy review, maintaining a neutral stance as it balances resilient growth against external risks. The decision, announced by Governor Sanjay Malhotra, followed three consecutive rate cuts earlier in the cycle and reflects caution amid heightened global uncertainty, disrupted trade routes and volatile markets stemming from the conflict in West Asia. Alongside the hold, the Monetary Policy Committee raised its forecast for India's real GDP growth in the current fiscal year to 6.7%, signaling confidence in the economy's underlying momentum even as inflation risks linger. The Governor said India is better positioned than in previous episodes of external shocks to manage global headwinds. The standing deposit facility and marginal standing facility rates were left unchanged in line with the repo decision. The central bank's next scheduled policy meeting is set for early October. Markets read the steady rate and upgraded growth outlook as a sign the RBI is comfortable holding for now, keeping borrowing costs stable for households and businesses while it watches how inflation and global conditions evolve.