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RBI Annual Report FY26: Repo Rate Held at 6.5%, Inflation Vigilance Flagged

· 5 min read·Source: RBI Annual Report 2025-26
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The Reserve Bank of India released its FY2025-26 Annual Report ahead of the June 2026 Monetary Policy Committee (MPC) meeting, with the benchmark repo rate held unchanged at 6.5%. The report, presented under Governor Sanjay Malhotra, noted that monetary policy transmission stayed steady through FY26, with foreign banks leading the decline in lending rates. A Finance Ministry review released alongside cautioned that the inflation outlook warrants vigilance and that consumption could face headwinds. The RBI also signalled it would estimate the natural real rate of interest and potential GDP growth for FY27 as part of its forward agenda.

Key Facts & Details

8 points
  • 1
    Repo rate kept unchanged at 6.5%
  • 2
    RBI Governor: Sanjay Malhotra
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    Monetary policy transmission steady in FY26; foreign banks led the fall in lending rates
  • 4
    Finance Ministry flagged inflation 'vigilance' and possible consumption headwinds
  • 5
    RBI to estimate natural real rate of interest and potential GDP growth for FY27

Deep Dive

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    The Annual Report is published under Section 53 of the RBI Act and reviews the working of the central bank for the financial year.
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    The MPC is a six-member committee chaired by the RBI Governor; the repo rate is the rate at which the RBI lends to commercial banks against government securities.
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    Steady transmission means changes in the repo rate are passing through to bank lending and deposit rates as intended.
Q

Exam Focus

Expect direct questions on the current repo rate (6.5%), the RBI Governor's name (Sanjay Malhotra), and the committee that decides the rate (MPC).

Related Topics

RBIMonetary PolicyRepo RateAnnual Report

Exam Relevance & Angle

Repo rate, the RBI Governor, and the MPC are among the highest-frequency banking-awareness topics in SBI/IBPS/RBI exams.

Target Exams

SBI POSBI ClerkIBPS POIBPS ClerkRBI Grade B

Background & Context

The repo rate is the RBI's principal policy tool for managing inflation and liquidity. The MPC sets it with a flexible inflation target of 4% (+/- 2%).

Related GK Concepts

Must Know
Monetary Policy CommitteeRepo RateInflation TargetingCRR and SLRMonetary Policy Transmission

Test Yourself

1 / 2

As per the RBI's FY2025-26 stance, what is the current repo rate?

Source

RBI Annual Report 2025-26

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SBI PO

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RBI Annual Report FY26: Repo Rate Held at 6.5%, Inflation Vigilance Flagged — Current Affairs 2026-05-30