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RBI Holds Repo Rate at 5.25%, Cautions on Global Risks to Growth

The Reserve Bank of India's Monetary Policy Committee has decided to keep the key repo rate unchanged at 5.25 percent. Governor Sanjay Malhotra noted that inflation has eased and economic activity remains strong, driven by robust private consumption and investment. However, the MPC cautioned that global uncertainties, including geopolitical conflicts and elevated crude oil prices, pose significant risks to both inflation and growth outlooks. The central bank also highlighted that government measures are helping contain supply chain disruptions.

Key Points: RBI Keeps Repo Rate Unchanged at 5.25% Amid Global Uncertainty

  • Repo rate unchanged at 5.25%
  • Inflation has eased since October
  • Growth driven by strong consumption and investment
  • Global conflicts and oil prices pose risks
  • Real GDP growth for previous year pegged at 7.6%
2 min read

RBI holds repo rate at 5.25 pc, maintains neutral instance amid global uncertainty

RBI maintains repo rate at 5.25%, highlights strong domestic growth but warns of risks from global conflicts and oil prices. Governor Sanjay Malhotra details MPC stance.

RBI holds repo rate at 5.25 pc, maintains neutral instance amid global uncertainty
"Growth impulses remain supported by robust private consumption and sustained investment demand - Sanjay Malhotra"

New Delhi, April 8

The Reserve Bank of India on Wednesday kept the repo rate unchanged at 5.25 per cent, and maintaining the status quo in its latest Monetary Policy Committee meeting.

The Standing Deposit Facility (SDF) rate has been kept unchanged at 5 per cent, while the Marginal Standing Facility (MSF) rate remains at 5.50 per cent, RBI Governor Sanjay Malhotra said while announcing the MPC decision.

The RBI Governor described 2025 as a challenging year, but noted that inflation has eased since the October policy. He also highlighted improved efficiency in the banking system as a key support for the economy.

"High-frequency indicators up to February indicate sustained strength in economic activity," Malhotra said.

He added that growth continues to be driven by strong private consumption and steady investment demand.

"Growth impulses remain supported by robust private consumption and sustained investment demand," Malhotra noted. Urban consumption is likely to strengthen further aided by the beneficial impact of GST rationalisation and the buoyant services sector, he added.

However, the MPC cautioned against global uncertainties. "The intensity and duration of the conflict, along with possible damage to energy and other infrastructure, pose risks to both inflation and growth outlooks," the Governor noted.

He also cautioned that elevated crude oil prices could add to macroeconomic pressures. "Elevated crude oil prices could increase imported inflation and widen the current account deficit," Malhotra said.

Further, the Governor warned that weaker global growth prospects may dampen external demand and reduce remittance flows. He further state that under the revised GDP series, real GDP growth for the previous year is pegged at 7.6 per cent.

Malhotra said potential disruptions in the Strait of Hormuz could weigh on growth in the current year.

He added that the government has taken proactive steps to ensure the availability of key inputs across critical sectors, helping contain supply chain disruptions. The Governor also noted that business sentiment continues to remain optimistic.

- IANS

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Reader Comments

R
Rohit P
Good move. The focus should be on controlling inflation first. The common man is still feeling the pinch of high prices for daily essentials. Let's hope the easing trend continues.
A
Aman W
The warning about the Strait of Hormuz is serious. A major chunk of our oil imports comes through there. The government's proactive steps on supply chains are reassuring, but we need a solid Plan B for energy security.
S
Sarah B
As an expat, the point about weaker remittance flows is concerning for many families back home who depend on it. The RBI seems to be taking a balanced, data-driven approach amidst global uncertainty.
V
Vikram M
While the decision is understandable, I feel the RBI could have been slightly more aggressive in supporting growth. MSMEs are still facing high borrowing costs. A small cut would have sent a strong positive signal.
K
Karthik V
The 7.6% GDP growth figure is impressive! If private consumption and investment remain strong, we can weather external storms. The key is to keep inflation in check so that this growth benefits everyone.

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