The Reserve Bank of India (RBI) on Wednesday kept the policy repo rate unchanged at 5.5%, with the Monetary Policy Committee (MPC) retaining a neutral stance amid ongoing global uncertainties and trade related developments. The decision was announced by RBI Governor Sanjay Malhotra, who noted that the central bank is waiting for the impact of previous policy actions before taking further steps.
The standing MSF rate and bank rate remain at 5.75%, while the SDF rate continues at 5.25%.
The RBI also revised the headline inflation projection for FY26 downward to 2.6%, from an earlier estimate of 3.7% in June and 3.1% in August. The Governor highlighted that inflation for Q4 FY26 and Q1 FY27 is expected to remain aligned with the target, despite base effect challenges.
Regarding economic growth, Malhotra stated that real GDP for FY26 is now projected at 6.8%, up from an earlier forecast of 6.5%. Growth is expected to moderate in H2 FY26 due to tariff and trade policy uncertainties, global volatility, and geopolitical tensions. He noted that the newly implemented GST reform, effective from September 22, is expected to partially mitigate external headwinds.
The RBI projected Q3 GDP growth at 6.4%, Q4 at 6.2%, and Q1 FY27 at 6.4%, emphasizing that risks to the growth outlook remain evenly balanced.