RBI Keeps Repo Rate Unchanged at 5.25%
- RBI repo rate remains unchanged at 5.25%
- Inflation concerns rise with surging crude oil prices
- RBI maintains neutral stance amid global economic uncertainties
- GDP grew 8.2% in the September quarter
- Annual inflation accelerated to 1.33% in December 2025
The Reserve Bank of India has maintained its key policy rate at 5.25 percent, as expected by experts.
Officials said the central bank is adopting a cautious approach, considering potential inflation headwinds and growth challenges.
Factors like West Asia turmoil, rising energy prices, and a weakening rupee are influencing this outlook.
Meanwhile, the RBI has decreased the repo rate by 25 basis points on December 5, 2025, and the current repo rate is 5.25%, while the reverse repo rate stands unchanged at 3.35%.
Inflation Concerns Rise
Concerns are rising over India's economic outlook due to surging crude oil prices and inflation.
Experts suggest the Reserve Bank of India might increase interest rates in the coming months.
Sources confirmed that the RBI is closely monitoring the situation and will take necessary steps to control inflation.
However, the RBI has maintained a neutral stance amid global economic uncertainties.
Despite this, the annual inflation accelerated to 1.33% in December 2025, but remained below the RBI's tolerance band of 2%–6%.
Economic Growth and GDP
India's GDP grew 8.2% in the September quarter, which is a positive sign for the economy.
Government sources said the growth is expected to continue, but the RBI needs to be cautious about inflation.
The Union Budget has boosted government spending, and US-India trade deals have raised expectations of stronger economic growth.
In contrast, some economists expect the RBI to hold rates after the much-better-than-expected GDP growth numbers.
The RBI has lowered the policy repo rate by 100 bps so far in 2025.
Historical Context and RBI Policy Rates
The Reserve Bank of India has announced the Monetary Policy Committee meeting schedule for 2026.
These meetings are conducted periodically to review the repo rate, inflation, and economic growth.
The current RBI policy rates are: Repo Rate at 5.25%, Standing Deposit Facility at 5.00%, Marginal Standing Facility at 5.50%, Bank Rate at 5.50%, Cash Reserve Ratio at 3.00%, and Statutory Liquidity Ratio at 18.00%.
The RBI Governor S Malhotra announced the MPC decision on interest rates, economic report card, and outlook.
Human Impact and Reactions
The RBI's decision to maintain the repo rate at 5.25% has a significant impact on the common man.
A lower repo rate typically reduces home loan EMIs, which is a positive sign for the housing sector.
However, the rising inflation concerns and surging crude oil prices may lead to higher interest rates in the future.
Witnesses said the RBI's decision is a balanced approach, considering the current economic situation.
Meanwhile, experts said the RBI needs to be vigilant about inflation and take necessary steps to control it.