RBI’s Monetary Policy Committee Maintains Policy Repo Rate and GDP Growth

• The Reserve Bank of India’s Monetary Policy Committee (MPC) maintains the policy repo rate at 5.50%, maintaining a neutral stance.

• The standing deposit facility rate under the liquidity adjustment facility (LAF) remains unchanged at 5.25%, while the marginal standing facility (MSF) rate and the bank rate remain at 5.75%.

• The decision aims to achieve the medium-term target for consumer price index (CPI) inflation of 4% within a band of +/- 2%, while supporting growth.

• The MPC notes that the global environment remains challenging, with global growth revised upwards by the IMF.

• The projection for real GDP growth for 2025-26 has been retained at 6.5%, with Q1 at 6.5%, Q2 at 6.7%, Q3 at 6.6%, and Q4 at 6.3%.

• CPI headline inflation declined for the eighth consecutive month to a 77-month low of 2.1% in June 2025, driven by improved agricultural activity and supply side measures.

• The inflation outlook for 2025-26 has been projected at 3.1%, with Q2 at 2.1%, Q3 at 3.1%, and Q4 at 4.4%.