RBI Repo Rate: Held at 5.25%, GDP Growth Seen at 6.9%

Context: RBI Repo Rate

The RBI Monetary Policy Committee (MPC) kept the repo rate unchanged at 5.25%, while revising GDP growth for FY27 to 6.9%, reflecting a cautious stance amid global uncertainties.

Key Data

1. Repo rate → 5.25% (unchanged)
2. GDP growth (FY27) → 6.9% (earlier ~7.6%)

Reasons for Keeping Repo Rate Unchanged

1. Global uncertainty (West Asia conflict)
   • Risk to oil supply (Strait of Hormuz)
   • Leads to imported inflation
   
2. Rising crude oil prices
   • Direct impact on inflation + fiscal burden
   
3. Inflation risks on upside
   • Energy + commodity shocks may increase prices
   
4. Growth risks on downside
   • GDP forecast reduced → need to support growth
   
5. Transmission of past rate changes
   • RBI waiting to see full impact of earlier policy actions
   
6. Exchange rate pressure
   • Rupee volatility due to global instability
   

Implication

1. EMIs → stable
2. Borrowing cost → no immediate increase
3. Policy stance → wait-and-watch / balanced approach