RBI keeps Repurchase Rate unchanged at 5.25%, as expected, via unanimous decision, while policy stance is kept at neutral

RBI Governor Malhotra says: Standing Deposit Facility Rate kept unchanged at 5%, while Marginal Standing Facility and Bank Rate remain at 5.5%. West Asia conflict continues to challenge the global economy. Global economic environment has become increasingly unstable. Crude oil prices and currencies and financial markets remain volatile. Headline inflation has edged up above target. High inflation is mostly on account on fuel and food, with little signs of a generalisation of price pressure so far. Headline inflation is expected to peak in Q3 this year, then moderate after, while underlying inflation reflected by core inflation excluding precious metals is set to align with core inflation towards the end of FY27. Growth continues to be supported by domestic demand. There is a need for greater clarity on inflation before taking policy action. Supply-side pressures from the West Asia conflict have eased somewhat. MPC underscored it will maintain a close vigil and stay resolute on aligning inflation to the target. Domestic economic activity has exhibited resilience and investment activity remains steady. Sees FY27 real GDP growth of 6.7% (prev. 6.6%) Sees FY27 CPI at 5.0% (prev. 5.1%) Growth risks are evenly divided. El Nino impact on rainfall distribution remains a major risk. Credit growth continues to remain robust and broad-based, while transmission in the credit market moderated slightly in May and June. Will ensure sufficient liquidity in the banking system. Will continue to curb excess volatility and check speculation in the foreign exchange market. To announce additional measures.