The Reserve Bank of India's Monetary Policy Committee, led by Governor Sanjay Malhotra, decided to keep the repo rate unchanged at 6.50% in its June 2026 review. This decision aligns with market expectations as the central bank continues to prioritize inflation control while supporting economic growth.
Key Highlights of the Policy
The MPC voted unanimously to maintain the status quo on the repo rate, which has remained at 6.50% since February 2023. The standing deposit facility rate and marginal standing facility rate also remain unchanged at 6.25% and 6.75%, respectively.
Inflation and Growth Outlook
Governor Malhotra noted that retail inflation is projected to average 4.5% in fiscal 2026-27, with risks evenly balanced. The MPC remains vigilant about food price pressures and global spillovers. On the growth front, GDP growth for 2026-27 is estimated at 7.2%, supported by robust domestic demand and investment momentum.
- Repo Rate: 6.50% (unchanged)
- Reverse Repo Rate: 3.35% (unchanged)
- Cash Reserve Ratio: 4.50% (unchanged)
- GDP Growth Projection: 7.2% for 2026-27
- CPI Inflation Projection: 4.5% for 2026-27
Policy Stance
The MPC maintained its 'withdrawal of accommodation' stance, indicating that rate cuts are not imminent. The central bank emphasized the need to see durable alignment of inflation with the target before considering any easing. Governor Malhotra stated that the economy is on a strong footing, but global uncertainties and domestic food price volatility require caution.
Market participants had widely expected a hold, given persistent inflation above the 4% target. The RBI's focus remains on anchoring inflation expectations while nurturing growth. The next MPC meeting is scheduled for August 2026.
In his statement, Malhotra highlighted that the Indian economy remains resilient, with strong forex reserves and banking system stability. The central bank will continue to use all available tools to ensure financial stability and price stability.
