RBI keeps rate unchanged at 5.5%

RBI sees GDP growth for FY26 unchanged at 6.5%, cuts inflation forecast to 3.1% from 3.7% earlier

- Roshan Kishore

Amid rising global uncertainty, the Reserve Bank of India has retained the policy rate at 5.5% and stuck to its forecast of 6.5% growth in GDP in 2025-26 even as the central bank's governor Sanjay Malhotra pointed to the country’s contribution to global growth.

“We (India) have a very robust growth rate,” Malhotra said, adding that “We are contributing about 18% which is more than US, where the contribution is expected to be much less at about 11% or something, We are doing very well and we will continue to further improve.”

While he did not refer to tariffs or US President Donald Trump, it is clear that the comments come in the context of the US President's reference to India as a “dead economy”.

On Wednesday, RBI's Monetary Policy Committee (MPC) of RBI has maintained a status quo on the monetary policy front with no change in interest rates or policy stance even though the Trump tariffs may have increased downside risks to India’s growth prospects. While the central bank has kept its GDP growth rate forecast for 2025-26 unchanged at 6.5% for now and significantly brought down the inflation forecast from 3.7% to 3.1%, experts believe that RBI is nudging the fiscal policy arm to support growth rather than further frontloading any monetary policy support without data warranting such a change. RBI has already cut the policy rate by a full percentage point since February.