RBI Monetary Policy Key Highlights: Lending Rate, Growth Projection, Inflation Outlook And More
In his MPC address, the RBI Governor stated that the inflation number has remained above target while momentum in the domestic economy has remained resilient.
The Reserve Bank of India Monetary Policy Committee has kept the repo rate unchanged at 5.5% for the second consecutive time, announced Governor Sanjay Malhotra.
The decision was made unanimously by the MPC committee, which has also unanimously decided to maintain a 'neutral' stance.
RBI's action comes against the backdrop of the US Federal Reserve, alongside several other central banks cutting rates globally.
In his MPC address, the RBI Governor stated that the inflation number has remained above target while momentum in the domestic economy has remained resilient.
RBI MPC Meeting: Five Key Highlights
Repo Rate & Stance Unchanged
The RBI has kept the repo rate unchanged at 5.5% for the second consecutive time, in what was a uninimous decision from the MPC.
RBI has also retain 'neutral' stance, with most of the commentary from the governor Sanjay Malhotra alluding to lower inflation.
Outlook On Inflation
The Reserve Bank of India lowered its inflation project for FY26 at 2.6% vs 3.1% earlier, with Sanjay Malhotra stating, "There has been a singificant moderation in inflation."
The inflation project of Q2FY26 and Q3FY26 stands at 1.8% while Q4FY26 stands at 4%.
The RBI governor further stated that the recent GST cuts will lead to reduction in prices in the CPI basket.
GDP Growth Projection
Real GDP growth for FY26 has been revised upward to 6.8% from the earlier estimate of 6.5%, which indicates stronger-than-expected economic performance.
This comes on the back of a strong Q1FY26 GDP growth number, which stood at an impressive 7.8%.
RBI Keeping A Close Eye On The Rupee
At a time when rupee has continued to face downward pressure, RBI has vowed to keep a close eye on the local currency.
"The rupee has witnessed depreciation. We will be Keeping a close on the volatility of rupee," Malhotra said in his MPC address.
Measures To Improve Banking Ecosystem
RBI has proposed a series of measures to improve credit flow, ease costs and expanding lending flexibility.
A risk-based deposit insurance premium framework will be introduced, lowering costs for higher-rated banks.
In an attempt to enhance lending flexibility, the central bank has also proposed to remove he regulatory ceiling on lending against listed debt securities.
Limits for lending against shares raised from Rs 20 lakh to Rs 1 crore per person, and IPO financing caps enhanced from Rs 10 lakh to Rs 25 lakh per person.
