The Reserve Bank of India has decided to keep the repo rate unchanged at 5.25%, while projecting India’s GDP growth at 6.9% amid global geopolitical tensions.
On April 8, 2026, the Reserve Bank of India (RBI) announced its decision to maintain the repo rate at 5.25% during the Monetary Policy Committee (MPC) meeting held from April 6 to 8. The MPC also confirmed its policy stance as ‘Neutral.’ This meeting took place against a backdrop of heightened global geopolitical tensions, particularly due to the ongoing conflict between the United States, Israel, and Iran.
The conflict has contributed to a significant rise in crude oil prices and a decline in the Indian rupee, with potential repercussions for financial markets. However, recent reports indicate that the U.S., Israel, and Iran have agreed to a two-week ceasefire, which is expected to halt U.S.-Israeli military actions in exchange for the reopening of the Strait of Hormuz.
The repo rate, or Repurchase Rate, is the interest rate at which the RBI lends money to commercial banks for short-term needs. This rate is a crucial tool for regulating liquidity, managing inflation, and stabilizing the economy.
During the April 2026 MPC meeting, the RBI projected India’s GDP growth for the fiscal year 2026-27 (FY27) at 6.9%. However, it revised its growth forecast for the first quarter of FY27 down to 6.8% from an earlier estimate of 6.9%. The growth forecast for the second quarter was also adjusted to approximately 6.7%, down from 7%. For the third and fourth quarters, the RBI estimates GDP growth at 7% and 7.2%, respectively.
In terms of inflation, the RBI projected the Consumer Price Index (CPI) inflation for FY27 at 4.6%. The central bank maintained its CPI forecast for the first quarter at 4.0%, while raising the second quarter CPI estimate to approximately 4.4%, up from the previous 4.2%. The CPI inflation estimates for the third and fourth quarters are set at 5.2% and 4.7%, respectively.
The RBI’s Monetary Policy Committee typically convenes six times a year for three-day meetings to determine the repo rate. The recent history of repo rate changes includes:
– April 2026: 5.25% (Unchanged)
– February 2026: 5.25% (Unchanged)
– December 2025: 5.25% (Decreased by 25 basis points)
– August/October 2025: 5.50% (Unchanged)
In its previous monetary policy meeting, the RBI opted to keep the repo rate steady, having already reduced it by a cumulative 125 basis points since February 2025.
As the global economic landscape continues to evolve, the RBI’s decisions will play a critical role in shaping India’s economic outlook. The central bank remains vigilant in monitoring both domestic and international developments that could impact economic stability.
For further insights, refer to reports from various public news sources.