Mumbai, Apr 8: The Reserve Bank of India (RBI) on Wednesday decided to keep the policy repo rate unchanged at 5.25% in its first monetary policy review for the financial year 2026-27, citing rising global uncertainties and ongoing geopolitical tensions.
RBI Governor Sanjay Malhotra announced that the Monetary Policy Committee (MPC) unanimously voted to maintain the repo rate under the liquidity adjustment facility at 5.25%. Consequently, the Standing Deposit Facility (SDF) rate remains at 5%, while the Marginal Standing Facility (MSF) rate and the bank rate continue at 5.5%.
“The MPC, after assessing the evolving macroeconomic and financial developments, has decided to keep the policy repo rate unchanged,” Governor Malhotra said. The three-day meeting, held on April 6, 7, and 8, evaluated the global and domestic economic conditions before finalizing the decision.
The central bank noted that the current policy comes amid heightened geopolitical tensions in West Asia, disruptions in global supply chains, and uncertainty in international financial markets. While India’s macroeconomic fundamentals showed strong growth and low inflation before the conflict, conditions turned challenging in March as the crisis intensified.
Governor Malhotra highlighted that India remains resilient, with fundamentals stronger than in previous crisis periods, providing a buffer against external shocks. However, he warned that rising energy prices, shortages of key inputs, and inflationary pressures are creating downside risks for global growth.
Global financial markets have also felt the impact, with safe-haven flows strengthening the US dollar, volatility in equity markets, and increased sovereign bond yields. Commodity prices, including metals and gold, have shown moderation, but geopolitical risk premiums continue to influence oil markets.