In accordance with market forecasts, RBI Governor Sanjay Malhotra maintained the repo rate at 5.25 percent. The six-member monetary policy committee deliberated for two days before making its unanimous conclusion.
Significantly, the repo rate announcement came only hours after US President Donald Trump declared a "double-sided ceasefire" with Iran. The two-week truce prompted a rise in global markets. Indian benchmark indices too experienced a gap higher opening.
The monetary policy committee, chaired by the RBI Governor, meets every two months to analyse key economic indicators and make policy decisions. The central bank kept the interest rate steady in its monetary policies for August, October, and February 2026.

Meanwhile, in a noteworthy development, the RBI deferred the due diligence requirement for MSMEs seeking to participate in various trading platforms in order to enhance ease of doing business, according to Governor Malhotra.

• At the RBI MPC meeting, Governor Sanjay Malhotra stated that India's macroeconomic fundamentals are strong, but the situation became more complicated in March due to the Iran war.
• Rising energy prices pose challenges to global prosperity.
• The conflict's uncertainty has a negative impact on the economy's prospects.
• Equities saw a board-based correction.
• The RBI expects real GDP growth in FY27 to slow to 6.9 percent due to conflict risks. Here are the quarterly projections: Q1 at 6.8%, Q2 at 6.7%, Q3 at 7%, and Q4 at 7.2%.
• India's foreign reserves are solid, totalling $697.1 billion.
• India's merchandise exports fell by 0.2% (year on year) in the first two months of this year.
• The STF rate remains at 5%, while the MSF and bank rates are still at 5.5%.

Rationale for Repo Rate Decision

• Headline inflation remains restrained and below the central bank's objective of 4%, although there is some upside potential.
• Weather disruptions pose a risk of raising food prices.
• In such a case, it is prudent to wait and watch.
• High crude prices may worsen the current account deficit.
• Disruptions in Hormuz are anticipated to have an impact on growth this year.