The Reserve Bank of India's Monetary Policy Committee (MPC) on Friday, June 5, kept the benchmark repo rate unchanged at 5.25%, with RBI Governor Sanjay Malhotra announcing the decision at 10:00 AM IST.
The move was largely in line with market expectations and marks the third consecutive policy meeting in which the central bank has maintained rates after delivering cumulative rate cuts of 125 basis points between February and December 2025.
The decision comes amid a challenging global backdrop marked by elevated crude oil prices, continued geopolitical tensions in West Asia, and volatility in currency markets. The Indian rupee recently touched record lows near Rs 97 against the US dollar, while foreign portfolio investors have remained net sellers in Indian markets during the current year.
By keeping rates unchanged, the MPC signalled that it prefers to assess the evolving inflation and growth outlook before making any further adjustments. The central bank faces a delicate balancing act between supporting economic growth and containing inflationary pressures that could arise from higher energy prices and global uncertainties.
Market participants will now focus on the RBI's updated inflation and growth projections, policy stance, and Governor Malhotra's commentary during the post-policy press conference scheduled for 12:00 PM IST.
The RBI's decision also comes at a time when India's FY27 GDP growth is projected at 6.9%, while policymakers continue to monitor capital flows, commodity prices, and external risks that could impact the domestic economy.
Investors will be watching closely for any announcements related to attracting foreign capital inflows, particularly measures concerning foreign portfolio investment in government securities and broader liquidity management initiatives.
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