India's RBI keeps repo rate unchanged at 5.25%

India's central bank has kept its key interest rate unchanged, opting for policy continuity as it assesses persistent inflation risks and global economic uncertainty. The Reserve Bank of India's Monetary Policy Committee announced its decision on Wednesday, August 5, following a three-day meeting held August 3-5. The panel, chaired by RBI Governor Sanjay Malhotra, unanimously decided to maintain the policy repo rate at 5.25 percent.

Consequently, the Standing Deposit Facility rate stays at 5 percent, while the Marginal Standing Facility rate and the bank rate remain at 5.5 percent. The committee also retained its neutral policy stance, indicating a continued balance between inflation control and growth support. This marks another pause after the committee held rates steady in its previous review in June.

Governor Malhotra outlined the committee's assessment of the macroeconomic landscape, noting that while the domestic economy has exhibited resilience, global challenges persist. He stated that headline inflation is expected to rise in the near term, fuelled by higher oil and food prices, with a peak anticipated in the third quarter before starting to decline. He clarified that...