The North News
Mumbai, August 6
The Reserve Bank of India (RBI) has kept the key repo rate unchanged at 5.5% following a three-day meeting of its Monetary Policy Committee (MPC).
RBI Governor Sanjay Malhotra, who chaired the 56th meeting of the MPC, said the decision was in line with the central bank’s goal of maintaining inflation within a 2-6% band while supporting economic growth.
The MPC, which comprises six members including Malhotra, voted to maintain a neutral stance on monetary policy. This means the RBI is neither leaning towards rate hikes nor cuts in the near term.
The standing deposit facility (SDF) remains at 5.25% and the marginal standing facility (MSF) and bank rate at 5.75%.
“Over the medium term, the Indian economy holds bright prospects in the changing world order, drawing on its inherent strengths,” said Malhotra.
Global and Domestic Outlook
The RBI said the global economic environment remains “challenging,” with ongoing uncertainties in trade and geopolitics. Although financial market volatility has eased slightly, the pace of disinflation has slowed in several advanced economies.
On the domestic front, the RBI observed resilience in economic activity. Private consumption, especially in rural areas, along with robust government capital expenditure, is supporting demand. Services and construction sectors continue to perform well, while industrial output remains uneven, particularly in electricity and mining.
A strong monsoon, improving reservoir levels, and healthy agricultural activity are expected to further boost rural income and consumption.
The RBI also noted that lower inflation, rising capacity utilisation, and continued policy support – both fiscal and monetary – will likely keep domestic growth on track in the months ahead.
