RBI Holds Repo Rate at 6.5% as Inflation Eases to 4-Month Low
The Reserve Bank of India's Monetary Policy Committee voted unanimously to hold the benchmark repo rate at 6.5%, citing easing retail inflation and stable growth momentum.
The Reserve Bank of India held its benchmark repo rate steady at 6.5% on Friday, as the six-member Monetary Policy Committee voted unanimously to maintain the current stance amid signs of easing inflation.
Retail inflation, measured by the Consumer Price Index, fell to a four-month low of 4.9% in January, moving closer to the RBI's 4% target. The central bank cited this cooling trend as a key factor in its decision to pause rate hikes for the fifth consecutive meeting.
RBI Governor Shaktikanta Das said the Indian economy remains resilient, with GDP growth expected to come in at 7% for the fiscal year. He noted that domestic consumption remains strong and the services sector continues to outperform expectations.
However, Das cautioned that global uncertainties — including volatile crude oil prices and tightening financial conditions in advanced economies — continue to pose risks to India's inflation outlook.
Markets reacted positively to the decision, with the NIFTY 50 rising 0.4% and the rupee strengthening marginally against the dollar. Bond yields fell slightly as investors priced in a longer pause before any potential rate cuts.
Analysts expect the RBI to begin cutting rates in the second half of 2026 if inflation continues its downward trajectory and global conditions stabilize.
Market Movers
Updated 19:47 IST
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