RBI Holds Repo Rate at 5.25% in First Policy Decision After Budget

• RBI kept the repo rate unchanged at 5.25% with a neutral policy stance
• India’s GDP growth is projected at 7.4% for the current year
• RBI proposed compensation for digital fraud losses up to ₹25,000 and new lending guidelines

The Reserve Bank of India maintains its repo rate at 5.25% because this decision represents its first monetary policy action after the Union Budget 2026 announcement. The announcement followed the three-day Monetary Policy Committee (MPC) meeting, which conducts its evaluations of macroeconomic factors every two months to determine the bank's policy decisions.

The RBI repo rate remains unchanged following the latest RBI policy decision, signaling stability in the Indian economy, with the repo rate unchanged as a response to the India budget impact and efforts towards inflation control India, while the monetary policy set by RBI 2026 keeps interest rate decision aligned with the country’s growth goals.

The decision was widely anticipated, supported by robust domestic growth and easing concerns over global trade tensions after a recent trade agreement with the United States.

Governor Malhotra noted that the US-India trade deal is a positive development for India’s economic outlook, reinforcing the country’s position as one of the fastest-growing major economies globally. The RBI maintained its neutral policy because this decision shows that the bank expects interest rates to stay the same during the upcoming period.

Also Read: USIBC, SICCI Welcome Budget 2026, Highlight US-India Ties

The governor announced that India continues to exhibit stable economic foundations, which will drive ongoing growth according to the existing data. The RBI introduced multiple customer-oriented initiatives together with its interest rate announcements.

The proposed framework would compensate customers who experience small-value digital transaction fraud losses up to ₹25,000. The draft guidelines provide solutions to three areas, which include loan misselling practices, recovery processes, and the behavior of recovery agents.

The RBI adjusted its inflation projections by increasing estimates to 4% for Q1 of FY2026-27 and 4.2% for Q2. The current financial year will see retail inflation reach a projected rate of 2.1%. The current year will show real GDP growth at 7.4%, which will decrease to 6.8% to 7.2% according to the Economic Survey forecast range for next year.