The Reserve Bank of India (RBI) has kept its repo rate unchanged at 5.5% as the rupee remains under pressure due to US President Donald Trump’s tariff threat. The rupee fell 16 paise yesterday, after Trump issued fresh threats to hike tariffs on Indian goods.
The decision was announced this morning at the Monetary Policy Committee (MPC) meeting, which is held every two months to draw up the central bank’s financial strategy.
It was decided to continue with the neutral stance, said RBI Governor Sanjay Malhotra at the end of the meeting, stating that the uncertainty over tariffs is still evolving and a monetary policy transmission is underway. The MPC resolved to maintain a close vigil on developing data, he said.
Mr Malhotra also shared the RBI’s outlook on geopolitical challenges.
Geopolitical uncertainties have somewhat abated, but global trade challenges continue to linger, the RBI chief said. While the Indian economy holds bright prospects over the medium term, he said that policymakers across the globe are faced with muted growth, slowing inflation.
Headline inflation is lower due to volatile food prices, but the RBI has projected it to go up from the last quarter. The inflation outlook for the current fiscal has become more benign than expected in June, said Mr Malhotra, projecting that retail inflation may edge above 4% in the January-March quarter.
Core inflation went up slightly in June due to an increase in gold prices and is likely to remain moderately above 4% during the year, he added.
The central bank has taken decisive, forward-looking measures to support growth, he assured.
RBI Press Releases – 06.08.2025
- Governor’s Statement: August 6, 2025
- Statement on Developmental and Regulatory Policies
- Monetary Policy Statement, 2025-26 Resolution of the Monetary Policy Committee August 4 to 6, 2025
Source from: https://www.ndtv.com/business-news/rbi-keeps-repo-rate-unchanged-at-5-5-amid-trump-tariff-threat-9028624
