The Reserve Bank of India Wednesday kept the repo rate unchanged at 5.5 per cent, keeping the monetary policy “neutral,” citing concerns over tariff uncertainties.
This is the second time that the repo rate has been kept unchanged.
Announcing the fourth bi-monthly monetary policy of the current fiscal, RBI Governor Sanjay Malhotra said, “The Monetary Police Committee (MPC) considered it prudent to wait for the impact of policy actions to play out and for greater clarity to emerge before starting the next course of action. Accordingly, the MPC unanimously voted to keep the policy repo rate unchanged at 5.5 per cent and also decided to retain the stance as neutral.”
Gov Malhotra also said that while the new GST rates, that came to implementation from September 22, will have a sobering impact on consumption and growth, tariff related developments may slow down the economic expansion in the second half of the current fiscal, as reported by PTI
The central bank had cut the repo rate by a total of 100 basis points in the February 2025, but paused at its previous meeting in August, trimming the repo rate by 50 basis points to 5.5 per cent.
RBI has projected inflation at 2.6 pc for FY26, lower than the earlier estimate of 3.1 pc.
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