RBI Holds Repo Rate Steady at 5.50% in 3rd Bi-monthly Monetary Policy FY2025-26.

Banking & Finance

The Reserve Bank of India (RBI) recently conducted its 56th meeting of the 3rd Bi-monthly Monetary Policy Committee (MPC) for FY2025-26 from August 4 to 6, 2025, under the chairmanship of Governor Shri Sanjay Malhotra. The MPC decided to keep the policy rates unchanged while maintaining a neutral stance.


      - The 3rd Bi-monthly Monetary Policy Committee (MPC) meeting was held over three days, from August 4 to 6, 2025, with the participation of all six members, including Governor Shri Sanjay Malhotra, Dr. Nagesh Kumar, Shri Saugata Bhattacharya, Prof. Ram Singh, Dr. Poonam Gupta, and Dr. Rajiv Ranjan. This was the 56th meeting since the MPC's formation.

      - The MPC unanimously voted to maintain the Policy Repo Rate under the Liquidity Adjustment Facility (LAF) at 5.50%. The decision also left the Standing Deposit Facility (SDF) rate unchanged at 5.25%, the Marginal Standing Facility (MSF) rate steady at 5.75%, and the Bank Rate fixed at 5.75%.

      - The committee's neutral stance reflects its dual focus on sustaining economic growth while keeping inflation under control. RBI stated that the unchanged rates would help the transmission of the earlier monetary easing measures into the economy.

Main Point :-   (i) The decision was influenced by the need to allow the effects of the earlier 100 basis points (bps) repo rate cut made in February 2025 to filter through to lending rates. The RBI believes this will stimulate economic activity in sectors that are sensitive to interest rates.

      (ii) Key RBI monetary policy rates after this meeting include: Repo Rate -5.50%, Reverse Repo Rate - 3.35%, Standing Deposit Facility (SDF) -5.25%, Marginal Standing Facility (MSF) - 5.75%, Bank Rate - 5.75%, Cash Reserve Ratio (CRR) - 3.00%, rand Statutory Liquidity Ratio (SLR) 18.00%.

(iii) This meeting's outcome is crucial for borrowers, investors, and the banking sector as it signals policy stability amid global economic uncertainties. It also underscores RBI's cautious approach to balancing inflation management with economic expansion.
About RBI

Governor: Sanjay Malhotra
Headquarter: New Delhi
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