The Reserve Bank of India has kept the benchmark repo rate unchanged at 5.25%, choosing to wait for greater clarity on inflation and international energy prices before changing borrowing costs.

All six members of the Monetary Policy Committee voted to retain the rate. The committee also maintained its “neutral” policy stance, leaving the RBI free to respond in either direction if economic conditions change.

The central bank raised its economic growth forecast for the current financial year to 6.7% from 6.6%. At the same time, it lowered its average retail-inflation projection to 5% from 5.1%.

The forecast for core inflation, which excludes food and fuel, was reduced from 4.7% to 4.3%.

What It Means for Borrowers

The decision means that loans linked directly to the repo rate are unlikely to see an immediate policy-driven change. However, individual banks can still revise lending and deposit rates depending on funding costs and market conditions.

RBI Governor Sanjay Malhotra said higher fuel prices had pushed headline inflation above the central bank’s target, while broader price pressures remained contained.

The RBI identified crude-oil prices, geopolitical developments, trade uncertainty and monsoon performance as important risks.

India’s foreign-exchange reserves, meanwhile, increased by approximately $10.5 billion to $692.9 billion in the week ended July 31. The larger reserve position gives the RBI more capacity to manage excessive volatility in the rupee.

The central bank has not committed to either a rate cut or an increase at its next meeting. Future decisions will depend on inflation, growth and global financial conditions.

RBI Keeps Repo Rate Unchanged at 5.25% After US-Iran Ceasefire

The Reserve Bank of India (RBI) has kept its repo rate unchanged at 5.25 per cent, offering relief to borrowers as the Monetary Policy Committee (MPC) assessed the lingering effects of the recent US-Iran war ceasefire.

RBI Governor Sanjay Malhotra announced the decision on Wednesday, 8 April 2026, marking the second consecutive hold on the key policy rate. The central bank has projected CPI inflation for FY27 at 4.6 per cent and GDP growth at 6.9 per cent, signalling cautious optimism amid global uncertainties.

RBI MPC Decision Announced

The MPC, in its April 2026 review, voted to maintain the status quo on the repo rate, which now stands at its lowest level in three years and eight months. This is the eighth policy meeting under Governor Malhotra, who took charge in December 2024.

Inflation Projections for FY27

The RBI has revised its inflation outlook with quarterly estimates of 4.0 per cent in Q1, 4.4 per cent in Q2, 5.2 per cent in Q3 and 4.7 per cent in Q4. For the full fiscal, the average projection stands at 4.6 per cent, reflecting contained pressures despite external risks.

GDP Growth Forecast Set

On the growth front, the central bank expects GDP to expand by 6.9 per cent in FY27, with quarterly projections of 6.8 per cent in Q1, 6.7 per cent in Q2, 7.0 per cent in Q3 and 7.2 per cent in Q4. The forecast comes as India navigates post-ceasefire global commodity swings.

Geopolitical Risks Highlighted

Governor Malhotra noted that the West Asia conflict, even after the ceasefire, continues to pose challenges through elevated crude oil prices and potential weather disturbances. He flagged an uncertain near-term inflation outlook due to volatility in global oil and commodity prices, which could still weigh on India’s growth trajectory.

Forex Reserves Stay Robust

India’s foreign exchange reserves remained healthy at $696.1 billion as of 3 April 2026, providing a strong buffer against external shocks. The RBI chief also highlighted that gold prices have moderated amid easing geopolitical tensions.

Market Reaction Positive

Ahead of the announcement, Indian equity benchmarks opened sharply higher, with the Sensex gaining over 2,700 points and the Nifty climbing 750 points. Realty, auto and financial shares led the rally. The rupee strengthened by 50 paise to 92.56 against the US dollar, reflecting investor confidence in policy continuity.

Neutral Stance Maintained

The MPC retained a neutral stance, keeping options open for future rate adjustments based on incoming data. This follows a cumulative 1.25 per cent repo rate cut since February 2025, which has already eased borrowing costs across the economy.

Home loan EMIs will not rise for now, bringing comfort to millions of borrowers and supporting consumption and investment demand. The unchanged RBI repo rate is expected to sustain momentum in the housing and auto sectors while keeping overall lending rates stable.

According to officials, India continues to remain an attractive destination for foreign investors despite global headwinds. The RBI’s balanced assessment underscores the central bank’s focus on supporting growth while guarding against inflation risks from international developments.

As the dust settles on the US-Iran ceasefire, the RBI’s April 2026 policy reinforces stability in India’s monetary framework. With the repo rate unchanged at 5.25 per cent, the central bank has signalled preparedness to navigate both domestic and global challenges in the coming quarters.