RBI holds interest rates at 5.5%, revises FY26 GDP to 6.8% and inflation to 2.6%

TRADE UNCERTAINTIES, INCLUDING US TARIFFS, REMAIN KEY CONCERN

- MPOST BUREAU

The Reserve Bank of India (RBI) on Wednesday kept its key interest rates unchanged, holding the repurchase rate at 5.5 per cent, while revising its growth and inflation forecasts for the current fiscal.

The central bank raised its GDP growth projection for 2025-26 to 6.8 per cent from 6.5 per cent, citing strong domestic drivers and an above-normal monsoon, and lowered its inflation outlook to 2.6 per cent from an earlier 3.1 per cent, reflecting subdued food prices and the rationalisation of GST rates.

RBI Governor Sanjay Malhotra noted that holding rates was “prudent” to allow the effects of earlier policy actions and recent fiscal measures to materialise. “The current macroeconomic conditions and the outlook have opened up policy space for further supporting growth,” he said. Malhotra highlighted that trade-related uncertainties, including the US imposing a 50 per cent tariff on imports from India and tighter H1-B visa norms, remain key considerations for future policy decisions.