The Reserve Bank of India (RBI) on kept the repo rate unchanged at 5.25%, maintaining a neutral policy stance, in its first Monetary Policy Committee (MPC) meeting after the presentation of Budget 2026.
Addressing the media after the three-day MPC meeting, RBI Governor Sanjay Malhotra said the decision was broadly on expected lines, citing a stable macroeconomic environment despite global uncertainties. He noted that tariff-related pressures have eased following the India-U.S. trade agreement.
Governor said, even as geopolitical risks and global financial volatility persists, the Indian economy remains in a “good spot”, supported by domestic demand, growth momentum and improving external conditions.
A key highlight of the Governor’s address was the announcement of a proposed consumer compensation framework. This is aimed at strengthening trust in the digital payment’s ecosystem. Under the proposed mechanism, consumers could be compensated up to Rs 25,000 for losses arising from small-value transaction frauds, subject to defined conditions.
The MPC’s decision to hold rates reflects a continued balancing act between growth and inflation. The central bank chooses to assess the impact of recent fiscal measures announced in Budget 2026 before making any policy adjustments. The neutral stance indicates that the RBI is keeping its options open, depending on how inflation, global commodity prices, capital flows and domestic growth dynamics evolve in the coming months.
The RBI’s next policy moves will likely hinge on incoming data on inflation trends, monsoon progress, global interest rate trajectories and the pace of domestic economic activity.
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