RBI MPC 2026: Gov Malhotra and co keep repo rate unchanged at 5.25%, maintain neutral stance

RBI MPC 2026: The Reserve Bank of India (RBI) kept the repo rate unchanged at 5.25 per cent, said RBI Governor Sanjay Malhotra in the latest monetary policy committee (MPC) announcements. He also said that the central bank would maintain the neutral stance. 

Gov Malhotra said the MPC has turned more cautious due to the geopolitical uncertainties.  

The decision to not change the key interest rates unchanged aligned with what most economists predicted for this round. However, the majority expect at least one increase by the year-end  due to the high risks from high oil prices and pressure on the rupee from weak capital inflows.

Nearly 80% of economists surveyed in the May 22-29 Reuters poll expected the MPC to keep the repo rate unchanged at 5.25% on June 5. Out of 56 respondents, 44 forecast no change in the rate. Among the remaining economists, 11 predicted a 25-basis-point hike, while one expected a 50-basis-point increase. In contrast, an April poll had only one respondent anticipating a rate hike in June.

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Meanwhile, other Asian central banks have started tightening their policies to support their currencies. Bank Indonesia surprised markets with a 50-basis-point rate hike last week, and the Philippines' central bank raised rates by 25 basis points in April.

India, Indonesia, and the Philippines face particular challenges as rising oil import costs coincide with capital outflows, driven by investors seeking safer assets.