India's central bank kept its key lending rate, the repo rate, unchanged at 5.25% for the fifth consecutive meeting, signaling a cautious approach amidst global uncertainties. Despite a slightly higher GDP forecast, the RBI is waiting for clearer signals on inflation before altering its policy stance.
6.7%
FY27 GDP Growth Forecast
June 2026: 6.6%→6.7%
📊 One chart explains it
RBI Repo Rate & FY27 GDP Growth Projection
Takeaway: The RBI has maintained a steady repo rate of 5.25% since October 2025, while revising the FY27 GDP growth forecast upwards to 6.7% in August 2026.
⏳ Time Machine
How today’s news fits into the bigger picture
June 2025
Inflation Breaches Target
CPI inflation reached 4.4%, moving above the RBI's target level for the first time in a while, prompting close monitoring.
October 2025
RBI Cuts Repo Rate
The RBI reduced the repo rate by 25 basis points from 5.5% to 5.25%, signaling an accommodative shift in .
January 2026
RBI Discussion Paper
The RBI released a discussion paper on licensing of urban co-operative banks, initiating a process dormant for two decades, indicating broader regulatory reforms.
June 2026
Previous MPC Meeting
The MPC maintained the repo rate at 5.25% and projected FY27 GDP growth at 6.6% and inflation at 5.1%, setting the baseline for today's revisions.
August 2026
Monetary Policy Review
The RBI held the repo rate steady at 5.25%, citing global risks but noting domestic economic resilience, while upgrading GDP and lowering inflation forecasts.
Today
RBI kept the repo rate at 5.25%, maintained a 'neutral' stance, and revised GDP and inflation forecasts for FY27.
What happens next?
The next MPC meeting in October 2026 will reveal if current global uncertainties or domestic data trigger a policy shift.
The Reserve Bank of India's Monetary Policy Committee (MPC) unanimously decided to maintain the benchmark repo rate at **5.25%** on August 5, 2026. This marks the fifth consecutive meeting where rates have remained unchanged. The RBI also retained its 'neutral' policy stance, indicating flexibility in future actions. Governor Sanjay Malhotra cited persistent global uncertainties, including the West Asia conflict, volatile crude oil prices, and uneven monsoon conditions, as key reasons for the wait-and-watch approach. Despite these challenges, the central bank raised its GDP growth forecast for FY27 to **6.7%** from 6.6% previously, reflecting confidence in domestic economic resilience. Simultaneously, the CPI inflation projection for FY27 was lowered to **5%** from 5.1%. The decision suggests the RBI is prioritizing stability while monitoring economic indicators closely.
💭 If you're wondering…
A 'neutral' stance means the RBI is not committed to either cutting or raising rates in the near future. It suggests the central bank will remain flexible and react to economic data as it emerges, rather than following a predetermined path.
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