RBI keeps repo rate unchanged, reduces GDP growth projection

The Reserve Bank of India (RBI) on Friday left the repo rate unchanged at 5.25%, choosing to wait for more clarity on the impact of rising crude oil prices, supply chain disruptions and geopolitical tensions on inflation and economic growth. The central bank also retained its "neutral" policy stance, signalling that future decisions will depend on incoming economic data and evolving global developments.Announcing the decision in Mumbai, RBI Governor Sanjay Malhotra said the global environment had become more challenging since the central bank's previous policy review in April. RBI lowers GDP growth projection to 6.6 pc from 6.9 pc earlier for current fiscal.

#WATCH | RBI Governor Sanjay Malhotra says, "CPI inflation remains below the target despite global shock as the pass-through to domestic prices has been limited. While the baseline projections point towards headline inflation forming up towards the upper tolerance level in Q3… pic.twitter.com/nckx8iZaP0

— ANI (@ANI) June 5, 2026

The RBI governor said that weak monsoon could also impact growth and inflation. He, however, added that "adequate stocks provide comfort". Malhotra said, "The global environment has deteriorated since the last policy meeting with the conflict lingering amidst a fragile truce. The adverse implications of the extended disruption in supply chains and elevated energy prices are reflected in the moderation of growth and increase in inflation projections from the April policy as discussed above." According to Malhotra, the impact of the global supply shock on domestic prices has so far remained limited.

(Business Correspondent)