RBI MPC Meeting 2025: Central Bank Keeps Repo Rate Unchanged For First Time Since December 2024

RBI MPC Meeting: The Reserve Bank of India (RBI) has kept the repo rate steady at 5.5 per cent, maintaining its policy stance as 'Neutral'. Announcing the decision, RBI Governor Sanjay Malhotra said the Monetary Policy Committee (MPC) unanimously voted to hold rates after implementing a cumulative 100 basis points cut earlier this year. He also cautioned that inflationary pressures are likely to intensify going forward. The MPC, which convened on August 4, 5, and 6, thoroughly assessed the prevailing economic and financial landscape before arriving at its decision.

The RBI Governor noted, "After a detailed assessment of the evolving macroeconomic and financial developments and outlook, the MPC voted unanimously to keep the policy rate under the Liquidity Adjustment Facility unchanged at 5.5 per cent."

Also Read: RBI MPC August 2025 Live: Governor Sanjay Malhotra Keeps Repo Rate Unchanged At 5.5%

Previous RBI MPC

The latest policy decision follows the Monetary Policy Committee's move in June to reduce the repo rate by 50 basis points to 5.5 per cent, a step taken in response to easing inflationary pressures. At the time, Governor Sanjay Malhotra noted that both near-term and medium-term inflation had fallen within the Reserve Bank’s comfort range, providing greater policy flexibility. He also pointed out that softening food inflation had further supported the central bank’s accommodative stance.

Retail inflation in India has continued its downward trajectory, hitting a six-year low. As per provisional data released by the Ministry of Statistics, the Consumer Price Index (CPI)-based inflation for June stood at 2.10 per cent year-on-year, marking a 72 basis point decline from May 2025 and the lowest level since January 2019.

Food inflation has also registered a significant decline. The Consumer Food Price Index (CFPI) for June showed a provisional year-on-year contraction of 1.06 per cent. In rural areas, food inflation was recorded at minus 0.92 per cent, while urban areas saw a decline of 1.22 per cent.

Wholesale prices have followed a similar trend. The Wholesale Price Index (WPI) for June came in at minus 0.13 per cent, down from 0.39 per cent in May. According to the Ministry of Commerce and Industry, the fall was driven by lower prices of food items, mineral oils, basic metals, crude petroleum, and natural gas.

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