reserve Bank of India (RBI) on Wednesday, keeping in mind the current conditions, decided to maintain the repo rate at 5.5 percent. Along with this, RBI has also kept the monetary policy attitude neutral. This means that the central bank will remain flexible for adjustment in the repo rate according to the economic situation. The repo rate is the interest rate on which commercial banks take loans from the central bank to meet their needs. The repo rate remains stable, there is no possibility of change in interest on home, car and other retail loans. Announcing the decisions of MPC, the RBI Governor said that the uncertainty of the tariff is still emerging.
Donald Trump imposed 25 percent tariff on India
Donald Trump has announced a 25 percent tariff on India. Apart from this, he has also spoken of imposing separate fine on India due to trade with Russia. If these decisions of Trump apply, then this will greatly affect Indian trade. The RBI has retained the growth rate of GDP (GDP) growth for the financial year 2025-26 at 6.5 percent. At the same time, the estimate of retail inflation for the current financial year has been reduced to 3.1 percent while earlier it was estimated to be 3.7 percent.
Southwest monsoon, low inflation, financial situations favorable
Sharing the decision of the third bilateral monetary policy for FY 2025-26, RBI Governor Sanjay Malhotra said that better Southwest monsoon, low inflation, capacity use and favorable financial conditions are supporting domestic economic activities. Assistant monetary, regulatory and fiscal policies including strong government capital expenditure are also expected to raise demand. Due to continuous increase in construction and trade in the coming months, there is a possibility of speed in the service sector.
The impact of a percentage cut in repo rate still continues
The governor said, “The growth rate is strong and is made according to estimates. However, this is less than our aspirations. The uncertainties of the fee are still emerging. The benefit of monetary policy is still available. Since February 2025, the impact of a percentage cut in repo rates on the economy is still going on. ”He said that the domestic growth rate is stable and is roughly moving as per the assessment. However, some high-frequency (such as GST collection, export, power consumption etc.) indicators have given mixed indications in May-June.
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