RBI Repo Rate Held at 5.25%: April 2026 MPC Decision
Why in the news
After the U.S. President announced a conditional temporary ceasefire in West Asia, RBI’s Monetary Policy Committee still chose caution, holding rates and flagging lingering risks to supply chains and energy prices.
| Variable | Decision | Earlier |
|---|---|---|
| Repo rate | 5.25%, unchanged | 5.25% |
| Stance | Neutral | Neutral |
| GDP growth forecast (2026-27) | 6.9% | 7.6% |
| CPI inflation projection | 4.5% | 4.4% |
Key facts
- Governor: Sanjay Malhotra described the conflict’s damage as a supply shock.
- Strait of Hormuz: a critical chokepoint for oil and gas; disruptions created input shocks, and infrastructure repair and shipping backlogs still slow growth.
- Oil assumption: $85 per barrel this year, $75 next year.
- Food risk: probable weather disturbances could push food prices up.
Background
- Neutral stance: the RBI is not committed to raising or cutting rates next, so it can move either way depending on inflation and growth data.
- Supply shock: India imports over 80% of its crude oil, so disrupted West Asian supply raises transport and production costs, causing cost-push inflation.
- Repo rate: the rate at which RBI lends to commercial banks; holding it balances inflation control against fragile growth.
Exam angle
- Repo 5.25%, Neutral stance, GDP 6.9%, CPI 4.5%.
- Related terms: MPC, cost-push inflation, basis points, Strait of Hormuz.