The Reserve Bank of India (RBI) retained the repo rate at 5. 25 percent on Wednesday, continuing the status quo in its most recent Monetary Policy Committee (MPC) meeting in the face of ongoing geopolitical tensions.

The Standing Deposit Facility (SDF) rate was also unchanged at 5%, while the bank rate and Marginal Standing Facility (MSF) rate were at 5. 5%.

Sanjay Malhotra, the governor of the RBI, stated that trade uncertainties persist because the United States has enacted new tariffs. He added that West Asia’s crisis is still causing instability in financial markets and crude oil prices.

The six-member Monetary Policy Committee (MPC) had been anticipated by a number of economists to keep interest rates constant and maintain its impartial policy position.

The policy review comes at a time when inflation has edged higher in recent months, despite staying inside the RBI’s tolerance range. The central bank’s forecast is still primarily influenced by West Asia events, currency movements, and rising crude oil prices.

Simultaneously, the domestic economy has remained resilient, thanks to healthy growth momentum, positive monsoon conditions, and significant inflows of foreign capital.

In June’s prior MPC meeting, the MPC voted unanimously to maintain the policy repo rate at 5. 25 percent, as economists had predicted. The Marginal Standing Facility (MSF) rate and the bank rate were 5. 5%, whereas the Standing Deposit Facility (SDF) rate was 5%.

Malhotra stated that even though the economy is still robust, there is growing strain in some sectors, and there are significant concerns about both inflation and growth evaluations.

The RBI revised its real GDP growth estimate for FY27 downwards in the June meeting, from 6. 9 percent to 6. 6 percent, due to increased global uncertainty, geopolitical conflicts, supply chain problems, and increasing energy costs.