RBI Keeps Interest Rates Unchanged

The Reserve Bank of India (RBI) has decided to maintain its current interest rate levels. RBI Governor Sanjay Malhotra announced the decision after the monetary policy review on Friday. The existing repo rate maintains its position at 5.25 percent.

This review is the first bi-monthly policy meeting held after the central government presented the Union Budget for the 2026–27 financial year.

Interest Rate Changes in the Previous Year

• The RBI made several rate cuts in the previous year.
• The RBI implemented a 25 basis point rate reduction in February 2025.
• The second 25 basis point reduction occurred in April 2025.
• The RBI implemented a 50 basis point reduction in June 2025.
• The December 2025 rate cut resulted in a 25 basis point reduction.
• The central bank decreased the repo rate by 1.25 percent throughout the entire year.

Key Highlights from the RBI Governor’s Statement

• Inflation and growth trends maintain their positive development.
• The Indian economy maintains its demonstrated ability to withstand challenges.
• Improved corporate performance generates advantages for manufacturing sector development.
• Unorganized sector activities maintain their regular operations which strengthen economic stability.

Trade and Growth Outlook

The recently concluded India–EU Free Trade Agreement is expected to support domestic growth. The proposed India–US trade agreement may further improve economic prospects.

The RBI has estimated economic growth at 7.4 percent for the current financial year. The 2026–27 financial year forecast projects:

• The first quarter will experience a 6.9 percent growth rate.
• The second quarter will experience a 7 percent growth rate.

Inflation and Liquidity Estimates

• The current financial year inflation rate prediction stands at 2.1 percent. The 2026–27 financial year
• The first quarter may experience inflation rates which will reach 4 percent.
• The second quarter may experience inflation rates which will rise to 4.2 percent.