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RBI holds repo rate steady at 5.25 percent
The Hindu··6 Aug
The RBI Monetary Policy Committee on August 5 unanimously kept the repo rate unchanged at 5.25 percent, with the SDF, MSF and bank rate corridor intact under a neutral stance. Governor Sanjay Malhotra projected GDP growth at 6.7 percent and CPI at 5 percent for 2026-27. June CPI rose to 4.4 percent after months below target.
Prism
What It Means For You
- Borrowers with repo-linked home or vehicle loans can expect near-term EMIs to stay broadly steady after the hold at 5.25%.
- Savers watching deposit rates should note the neutral stance keeps the policy path open, not locked into cuts.
- Anyone budgeting for 2026-27 can weigh the 6.7% GDP forecast against a 5.0% CPI projection and June's 4.4% print.
What's Happening
- On August 5, the MPC unanimously kept the repo rate at 5.25%, with the SDF at 5% and the MSF and bank rate at 5.50%, under a neutral stance.
- Governor Sanjay Malhotra projected 2026-27 GDP growth at 6.7% and CPI inflation at 5.0%.
- Retail CPI rose to 4.4% in June after 16 months below the inflation target.
Why The MPC Held Rates Despite A Growth Upgrade
- A neutral stance lets the RBI wait for more inflation and growth data before choosing the next move.
- June's rise in CPI toward target strengthens the case for patience even when growth forecasts improve.
- The SDF-MSF corridor around 5.25% keeps short-term money market rates anchored while policy stays on hold.
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