RBI MPC Meeting June: Gov Sanjay Malhotra Announces Status Quo; Repo Rate at 5.25%, Neutral Stance Continues

The Reserve Bank of India (RBI) on Friday kept the benchmark repo rate unchanged at 5.25 percent in its second bi-monthly Monetary Policy Statement of the financial year 2026-27, extending the central bank's rate pause for a third consecutive policy review.

RBI MPC Maintains Status Quo on Rates, Continues Neutral Policy Stance

The decision was announced following the conclusion of the three-day meeting of the Monetary Policy Committee (MPC), chaired by RBI Governor Sanjay Malhotra. The six-member committee voted to maintain the policy repo rate at 5.25 percent and retained the neutral policy stance.

While this was the second monetary policy review of FY27, it marked the third straight occasion on which the RBI chose to leave interest rates unchanged. The central bank had last reduced the repo rate in December 2025 and has since maintained status quo as it assesses the impact of cumulative policy easing and monitors inflation and growth trends.

The RBI has lowered the benchmark lending rate by a cumulative 125 basis points since February 2025.

RBI Cuts FY27 GDP Growth Forecast to 6.6%, Lowers Estimates Across All Quarters

RBI lowered its FY27 GDP growth forecast to 6.6 percent from 6.9 percent earlier, reflecting a more cautious outlook amid global uncertainties. The central bank also trimmed its quarterly projections, cutting Q1FY27 growth to 6.6 percent from 6.8 percent, Q2FY27 to 6.3 percent from 6.7 percent, Q3FY27 to 6.5 percent from 7 percent, and Q4FY27 to 6.8 percent from 7.2 percent.

RBI Raises FY27 Inflation Forecast to 5.1%, Sees Core Inflation at 4.7%

It revised its inflation outlook upward for FY27, raising the Consumer Price Index (CPI) inflation projection to 5.1% from the earlier estimate of 4.6%.

The central bank also projected core inflation at 4.7% for the current financial year, indicating that underlying price pressures are expected to remain elevated despite efforts to maintain price stability.

"The RBI Monetary Policy Committee's decision to keep the repo rate unchanged at 5.25%, with the SDF at 5.00% and MSF and Bank Rate at 5.50%, reflects a calibrated and prudent approach in the current macroeconomic environment. By maintaining a neutral stance, the RBI has signalled its intent to closely monitor evolving inflation trends, global uncertainties and crude oil price volatility before undertaking further policy action," said Sadaf Sayeed, CEO, Muthoot Microfin.

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