New Delhi, August 5: The Reserve Bank of India’s Monetary Policy Committee has decided to keep the benchmark repo rate unchanged at 5.25 per cent while retaining its neutral stance, citing the necessity for clearer visibility on the inflation trajectory.
Announcing the decisions of the three-day meeting, RBI Governor Sanjay Malhotra stated that key policy corridors remain unaltered, with the Standing Deposit Facility rate placed at 5.0 per cent, alongside the Marginal Standing Facility and bank rate held at 5.5 per cent. The central bank has revised its Consumer Price Index inflation projection for the current financial year to 5.0 per cent, which is 10 basis points lower than previous estimates.
Delivering the monetary policy statement, Governor Malhotra noted that headline inflation faces upward momentum primarily driven by food and energy supply pressures. “Core inflation, excluding precious metals is projected to be lower than core, although it is likely to align with core inflation towards the end of the financial year,” Governor Malhotra stated. He maintained that core inflation, excluding food and fuel, held firm at 3.9 per cent through May and June despite rising input costs. The central bank asserted that near-term liquidity conditions are anticipated to stay manageable as cash balances draw down, even as global commodity volatility, geopolitical developments, and uneven monsoon distribution remain key watch points.
