RBI’s Monetary Policy Committee (MPC), chaired by Governor Sanjay Malhotra, on Wednesday decided to keep the Repo Rate unchanged at 5.50% in its third bi-monthly policy review for FY26. Alongside this, the central bank also maintained its policy stance as ‘neutral’, signalling flexibility in either direction based on evolving economic data.
This decision follows a total of 100 basis points cut in the repo rate between February and June 2025, including a surprise 50 bps reduction last policy. The unchanged stance was broadly expected by economists, who cited moderating inflation trends and global trade uncertainties triggered by US President Donald Trump’s recent tariff announcements.
Despite speculation of another 25 bps cut, the RBI opted for caution. The repo rate—used by the RBI to lend money to commercial banks—remains at 5.50%, while the reverse repo rate stays unchanged as well.
The MPC is also expected to revise its FY26 inflation forecast downward, reflecting recent softening in prices, while retaining GDP growth projections for the year.
A neutral stance means the central bank is not tilted toward either monetary easing or tightening in the near term, providing space to act as needed.
