RBI Holds Repo Rate at 5.25%, Slashes Inflation Forecast

The Reserve Bank of India left the repo rate at 5.25% for a fourth consecutive meeting, maintaining a neutral policy stance. Policymakers view the recent inflation overshoot as supply-driven and lowered the FY2026-2027 inflation forecast.

At the same time, the central bank lifted its growth outlook for the same period, signaling confidence in underlying demand. Commerzbank’s Charlie Lay noted that the extended pause offers only limited support for the Indian rupee.

The RBI’s neutral bias and moderate inflation adjustments suggest no imminent rate cuts, but markets will watch for any shift driven by growth or external pressures.