The Reserve Bank of India has kept its policy rate unchanged at 5.25%, signalling a cautious wait-and-see approach as Governor Sanjay Malhotra cites global risks and inflation clarity as key factors influencing future moves.
The Reserve Bank of India has kept its policy rate on hold as Governor Sanjay Malhotra said the central bank sees little reason to move until the outlook for inflation becomes clearer. Speaking as he unveiled the latest monetary policy, he said the picture remained clouded by the monsoon, El Niño, geopolitical risks and shifting global trade policy, and that the RBI would wait for a better read on how prices are behaving before making any fresh move. The repo rate was left unchanged at 5.25%.
For borrowers, the immediate effect is simple: home loans, personal loans and other floating-rate borrowings are unlikely to get cheaper straight away. For savers, fixed deposit rates may also stay broadly where they are for now. The RBI is signalling caution rather than urgency, which usually means it wants to see whether earlier policy changes are still working through the economy before deciding on the next step.
That restraint follows a similar approach the central bank took through 2025, when it kept the repo rate steady at 5.5% after earlier cuts, while holding its policy stance at neutral. Business Standard reported at the time that the Monetary Policy Committee also left the standing deposit facility rate at 5.25% and the marginal standing facility rate at 5.75%, while trimming its inflation forecast for 2025-26 to 3.1%. Later, in October 2025, the RBI again kept rates unchanged and lowered its average headline inflation estimate for FY26 to 2.6%, while lifting its real GDP growth forecast to 6.8%, suggesting that policy makers have been navigating a relatively rare mix of softer inflation and decent growth.
For households and businesses, the key thing to watch now is whether inflation continues to stay contained as food prices, weather patterns and global trade tensions evolve. If price pressures remain mild and growth holds up, the RBI will have more room to rethink its stance. If not, the central bank may continue to wait. In practice, that means loan rates, deposit returns and the broader cost of credit are likely to stay sensitive to incoming inflation data over the next few months.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
