RBI Keeps Repo Rate Unchanged at 5.5%

• On August 4, 2025, the Reserve Bank of India's Monetary Policy Committee (MPC) decided to maintain the repo rate at 5.5%, keeping its stance neutral. As a result, the Standing Deposit Facility (SDF) rate will remain at 5.25%, and the Marginal Standing Facility (MSF) rate and the Bank Rate will stay at 5.75%.
• Despite the US tariffs on Indian imports, the RBI has retained its GDP growth forecast for FY26 at 6.5%. Inflation is projected to be 3.1% for FY26, down from the June estimate of 3.7%, although the Consumer Price Index (CPI) is expected to reach 4.9% in FY27.
• With falling inflation and global uncertainties, the RBI has indicated a cautious approach to support domestic demand while managing external risks. The MPC meetings were held on August 4, 5, and 6, 2025. The next MPC meeting is scheduled from September 29 to October 1, 2025.
• This is the first time the repo rate has been kept unchanged during the tenure of Governor Sanjay Malhotra, who took office earlier this year.

• The repo rate (Repurchase Agreement Rate) is the interest rate at which commercial banks borrow money from the central bank.
• The Urjit Patel Committee (2014) formalized the inflation target, setting a target of 4% (with a ±2% band).
• India's inflation-targeting framework, adopted in 2016, aligns its monetary policy with global best practices.
• This target was first proposed 40 years ago by the Chakravarty Committee (1982-85), which was formed by the then RBI Governor Manmohan Singh.

Other Rates Mentioned in the Report

• CRR: 3%
• SDF Rate: 5.25%
• MSF Rate: 5.75%
• Bank Rate: 5.75%