RBI Maintains Repo Rate at 5.25%, Neutral Stance; Lowers GDP Growth Projection to 6.6%

The Reserve Bank of India's Monetary Policy Committee (MPC), chaired by Governor Sanjay Malhotra, concluded its June 2026 meeting (3-5 June) with a unanimous decision to maintain the repo rate at 5.25% and continue with the neutral policy stance for the third consecutive meeting. The RBI has lowered its GDP growth projection to 6.6% from 6.9% earlier for FY26-27, while raising CPI inflation projection to 5.1% from 4.6%. Governor Malhotra highlighted that elevated energy prices due to the West Asia conflict are reflecting in moderate growth and rising inflation. India's foreign exchange reserves provide sufficient buffer against external shocks, with the rupee trading near record lows around 95.8 to the dollar. The central bank remains vigilant to address challenges arising from geopolitical tensions. Key exam facts: Repo rate is the rate at which RBI lends short-term money to commercial banks; MPC has 6 members; monetary policy decisions impact lending rates, inflation, and economic growth.