The Reserve Bank of India (RBI) has decided to maintain the repo rate at 5.50 percent, continuing its neutral policy stance, following the fourth meeting of the Monetary Policy Committee (MPC) for the 2025–26 financial year.

This marks the second consecutive time the central bank has kept rates unchanged, after reducing them three times earlier in the year—from 6.5 percent to 5.5 percent—through 25-50 basis point cuts in February, April, and June, aimed at supporting economic growth.

In a positive signal for the economy, the RBI raised its GDP growth forecast for FY26 to 6.8 percent, up from 6.5 percent, while reducing the inflation estimate to 2.6 percent from 3.1 percent, reflecting optimism about India’s economic resilience and improving price stability.

Governor Sanjay Malhotra highlighted the recent GST rate rationalisation as a measure likely to boost consumer spending and ease inflationary pressures, while cautioning that higher global tariffs could affect India’s exports and create uncertainties in the economic outlook.

The RBI is also monitoring international developments, such as the H-1B visa fee hike and the HIRE Act in the US, which could impact Indian job markets and remittances, potentially influencing future monetary policy decisions.

While adopting a cautious stance, the RBI remains prepared to intervene if inflation or growth trends deviate significantly. Analysts say the decision provides markets and businesses with a stable interest rate environment and a stronger economic outlook to plan ahead.