Central bank holds repo rate at 5.25%

The Reserve Bank of India kept its benchmark interest rate unchanged on Friday, as expected, as inflation remained at manageable levels and growth concerns eased following increased Government spending in the Budget and reduced tariff pressures after a trade deal with the United States.

The central bank’s six-member Monetary Policy Committee (MPC) voted unanimously to keep the repurchase or repo rate at 5.25 per cent. RBI retained its neutral policy stance, signalling that it is likely to remain on hold for now. US President Donald Trump earlier this week announced a cut in tariffs on Indian goods to 18 per cent from 50 per cent, easing a key pressure point on India’s economy and markets.

Announcing the decisions of the MPC, RBI Governor Sanjay Malhotra said external headwinds have intensified, but the successful completion of the trade deal with the United States bodes well for the economy.