Source The Hindu
The Reserve Bank of India’s Monetary Policy Committee (MPC) on Thursday decided to keep the benchmark repo rate unchanged at 5.25 per cent, maintaining the status quo for the third consecutive policy review. The decision was in line with market expectations amid easing inflationary pressures and the need to support economic growth.
Announcing the outcome of the bi-monthly policy meeting, RBI Governor said the MPC remains committed to achieving the medium-term inflation target of 4 per cent, while ensuring adequate liquidity to sustain recovery across sectors. All members voted in favour of keeping the policy rate unchanged.
The central bank noted that retail inflation has shown signs of moderation, supported by softer food prices and stable global commodity trends. However, it cautioned that risks remain due to geopolitical uncertainties, volatile crude oil prices and uneven global growth prospects.
On the growth front, the RBI maintained its optimistic outlook for the Indian economy, citing strong domestic demand, improved investment activity and resilient services sector performance. The MPC emphasised that future policy actions will remain data-dependent, with close monitoring of inflation trends and financial stability.
The policy stance continues to be described as “neutral,” giving the RBI flexibility to respond to evolving economic conditions. Analysts believe the pause in rates provides relief to borrowers while allowing the central bank to assess the impact of previous measures on inflation and growth.
The next MPC meeting is scheduled later this year, where further clarity on inflation trajectory and global economic developments is expected to shape the central bank’s decision-making.
