ECONOMY
RBI keeps Repo Rate unchanged at 5.25%, cites upside risks to inflation and growth
- IBJ Bureau
- Apr 09, 2026
The Reserve Bank of India (RBI) has kept its key policy Repo Rate unchanged at 5.25 per cent.
The central bank’s six-member Monetary Policy Committee has warned of lower growth and higher inflation, as the West Asia crisis reverses a Goldilocks phase for India.
India, which imports about 90 per cent of its oil, is among the economies most exposed to prolonged war-related disruptions.
That vulnerability is already rattling investors, and the rupee has slid to a record low, as foreign funds have pulled out nearly $19 billion from markets between March and early April.
While inflation remains in check, “risks are on the upside”, RBI Governor Sanjay Malhotra has said, adding that higher oil prices and shortages of key inputs, such as gas, could also dent growth momentum.
“The initial supply shock can potentially transform into a demand shock over the medium term, if the restoration of supply chains is delayed,” Mr Malhotra has said.
The central bank has released its first economic forecasts for the current financial year, with GDP growth expected to fall to 6.9 per cent in 2026-27 from an expected 7.6 per cent in the year ended March 31, 2026.
Average inflation for the year is seen at 4.6 per cent, within the central bank’s target band of 2-6 per cent.
For the 11 months of 2025-26, for which data is available, average inflation was at 1.95 per cent.
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