RBI MPC keeps repo rate unchanged at 5.25%, for second time in row, amid West Asia crisis

The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) has decided to keep the repo rate unchanged for the second time in a row, at 5.25%, Governor Sanjay Malhotra announced on Friday (June 5, 2026).

While announcing the decision, Mr. Malhotra highlighted increased market volatility in recent times and said that monetary policy around the world has turned more cautious. 

RBI Monetary Policy Committee updates on June 5, 2026

“We remain confident to withstand these shocks, with minimum pain,” he added noting that the global economic outlook remains clouded. 

Expanding on the decision taken by the MPC, Governor Malhotra said that the Committee took into account the uncertainty surrounding the duration and intensity of the ongoing West Asia conflict, magnitude of its spillover effects, and the pace of restoration of supply chains. Accordingly, the MPC felt it was prudent to wait for greater clarity to emerge, and accordingly chose to continue with a neutral stance. 

Real GDP growth projection reduced; CPI inflation below target

Speaking on inflation, the RBI Governor said that headline CPI inflation was below the 4% target during March (3.4%) and April (3.5%) this year. While food inflation edged up, he said, fuel inflation remain muted as fuel prices remain unchanged in those months. Core inflation remained stable at 3.7%, the Governor added. 

Governor Malhotra announced that the Real GDP growth has been projected at 6.6%, down by 0.3% from earlier projection of 6.9% for FY27. “Prolonged global supply chain disruptions, volatility in global financial markets, and weather-related shocks continue to pose downside risks to the domestic growth outlook,” Mr. Malhotra said.

The Governor also noted that food outlook remains uncertain, and pass through of higher fuel prices are now visible.