RBI Holds Repo Rate at 5.25% Amid Global Uncertainty
Governor cites war risks, inflation outlook; GDP growth seen at 6.9% for FY27
GG News Bureau
Mumbai, 8th April: The Reserve Bank of India on Tuesday kept the repo rate unchanged at 5.25 per cent, with the Monetary Policy Committee (MPC) opting for a cautious approach amid global uncertainties.
Announcing the decision, RBI Governor Sanjay Malhotra said the move was taken unanimously after a two-day deliberation, with the central bank choosing to “wait and watch” evolving economic conditions.
The policy announcement came hours after US President Donald Trump declared a temporary ceasefire with Iran, which triggered a rally in global markets and a positive opening for Indian equities.
Malhotra noted that while India’s macroeconomic fundamentals remain strong, global risks—particularly due to rising energy prices and geopolitical tensions—continue to weigh on the outlook. He highlighted that uncertainty linked to disruptions in key trade routes such as the Strait of Hormuz could impact growth.
The RBI projected India’s real GDP growth for FY27 at 6.9%, with quarterly estimates at 6.8% in Q1, 6.7% in Q2, 7% in Q3 and 7.2% in Q4.
On inflation, the central bank said headline inflation remains below its 4% target but flagged upside risks from potential food price increases due to weather disruptions and elevated crude oil prices.
India’s forex reserves were reported at $697.1 billion, reflecting external sector strength, though merchandise exports saw a marginal contraction of 0.2% in the early part of the year.
In a relief for small businesses, the RBI also announced the suspension of due diligence requirements for MSMEs on certain trade platforms, aimed at improving ease of doing business and access to financial systems.
The central bank retained the Standing Deposit Facility (SDF) rate at 5% and the Marginal Standing Facility (MSF) rate and bank rate at 5.5%.
