New Delhi: The Reserve Bank of India (RBI) on Wednesday kept the repo rate unchanged at 5.25 per cent, and maintaining the status quo in its latest Monetary Policy Committee (MPC) meeting.
The Standing Deposit Facility (SDF) rate has been kept unchanged at 5 per cent, while the Marginal Standing Facility (MSF) rate remains at 5.50 per cent, RBI Governor Sanjay Malhotra said while announcing the MPC decision.
The RBI Governor described 2025 as a challenging year, but noted that inflation has eased since the October policy. He also highlighted improved efficiency in the banking system as a key support for the economy.
“High-frequency indicators up to February indicate sustained strength in economic activity,” Malhotra said.
He added that growth continues to be driven by strong private consumption and steady investment demand.
“Growth impulses remain supported by robust private consumption and sustained investment demand,” Malhotra noted. Urban consumption is likely to strengthen further aided by the beneficial impact of GST rationalisation and the buoyant services sector, he added.
However, the MPC cautioned against global uncertainties. “The intensity and duration of the conflict, along with possible damage to energy and other infrastructure, pose risks to both inflation and growth outlooks,” the Governor noted.
He also cautioned that elevated crude oil prices could add to macroeconomic pressures. “Elevated crude oil prices could increase imported inflation and widen the current account deficit,” Malhotra said.
Further, the Governor warned that weaker global growth prospects may dampen external demand and reduce remittance flows. He further state that under the revised GDP series, real GDP growth for the previous year is pegged at 7.6 per cent.
Malhotra said potential disruptions in the Strait of Hormuz could weigh on growth in the current year.
He added that the government has taken proactive steps to ensure the availability of key inputs across critical sectors, helping contain supply chain disruptions. The Governor also noted that business sentiment continues to remain optimistic.
(IANS)
