RBI Maintains Repo Rate Amid Global Trade Uncertainties

The Reserve Bank of India (RBI) has held its policy interest rate steady at 5.5% following deliberations by the six-member rate-setting panel, led by Governor Sanjay Malhotra. The decision reflects a wait-and-see approach amidst global trade tensions, including tariffs imposed by US President Trump.

Despite on-track monsoon rains and the festival season offering economic momentum, challenges such as rising inflation and US tariffs on Indian goods counterbalance these positives. The Monetary Policy Committee maintained a 'neutral' stance, projecting a moderate GDP growth of 6.5% for FY26.

Economists highlight that despite a favorable inflation forecast of 3.1%, potential inflationary pressures, and financial market uncertainties might hinder further rate cuts. Malhotra emphasized the importance of adaptive monetary policy as the Indian economy seeks growth while maintaining price stability.

(With inputs from agencies.)