rbi-keeps-lending-rate-unchanged-at-5-5-amid-trade-woes

The Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC), led by Governor Sanjay Malhotra, has opted to keep key lending rates unchanged at 5.5 per cent. The decision was announced on Wednesday following a three-day meeting from August 4-6.

According to Governor Malhotra, the MPC unanimously voted to maintain the policy repo rate under the Liquidity Adjustment Facility (LAF) at 5.5 per cent. Consequently, the Standing Deposit Facility (SDF) rate will remain at 5.25 per cent, and the Marginal Standing Facility (MSF) rate and the Bank Rate will both stay at 5.75 per cent. The committee also decided to continue with a "neutral" monetary policy stance.

#WATCH | RBI Governor Sanjay Malhotra says, "...Over the medium term, the Indian economy holds bright prospects in the changing world order, drawing on its inherent strengths..." pic.twitter.com/PyNhjCdrMR

— ANI (@ANI) August 6, 2025

 

The MPC's assessment of the economic situation found that while headline inflation is lower than previously projected, this is primarily due to fluctuations in food prices, particularly vegetables. In contrast, core inflation has remained stable around the anticipated 4 per cent level. The committee projects that inflation will begin to increase from the last quarter of the current financial year.

 

Also Read: 17 crore jobs created under Modi government, claims Mandaviya

 

#WATCH | Monetary Policy Committee decides to keep the policy repo rate unchanged at 5.5%, neutral stance to continue, says RBI Governor Sanjay Malhotra.

(Video source: RBI/YouTube) pic.twitter.com/dZLo5WjFKj

— ANI (@ANI) August 6, 2025

The committee noted that growth remains robust, although it is below previous expectations. The impact of evolving uncertainties surrounding tariffs was also acknowledged. The transmission of previous monetary policy decisions is ongoing.

Governor Malhotra explained that the full effect of the 100 basis points rate cut implemented since February 2025 is still unfolding in the broader economy. "On balance, therefore, the current macroeconomic conditions, outlook and the uncertainties call for continuation of the policy repo rate of 5.5 per cent and wait for further transmission of the front-loaded rate cut to the credit markets and to the broader economy," he stated.

#WATCH | RBI Governor Sanjay Malhotra says, "The real GDP growth for 2025-26 is projected at 6.5%".

(Video source: RBI/YouTube) pic.twitter.com/3P7SLEufYT

— ANI (@ANI) August 6, 2025

In line with this, the MPC unanimously voted to keep the repo rate unchanged and resolved to maintain a close watch on incoming data and the evolving dynamics of domestic growth and inflation to determine the future direction of monetary policy.

 

Also Read: No plans to stop supply of ₹500 notes: MoS Finance