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RBI holds repo rate at 5.25%, keeps neutral stance; raises FY27 inflation forecast to 5.1%

· 5 min read·Source: Business Standard
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The Reserve Bank of India's Monetary Policy Committee (MPC), led by Governor Sanjay Malhotra, kept the policy repo rate unchanged at 5.25% at its second bi-monthly review of FY27, announced on June 5, 2026. The MPC retained its 'neutral' policy stance amid West Asia conflict, elevated energy prices and global uncertainty. It lowered the FY27 real GDP growth forecast to 6.6% (from 6.9%) and raised the retail (CPI) inflation forecast to 5.1% (from 4.6%). The Standing Deposit Facility (SDF) rate stays at 5% and the Marginal Standing Facility (MSF) rate at 5.5%.

Key Facts & Details

8 points
  • 1
    Repo rate unchanged at 5.25%; policy stance remains 'neutral'.
  • 2
    FY27 real GDP growth forecast cut to 6.6% from 6.9%.
  • 3
    FY27 CPI inflation forecast raised to 5.1% from 4.6% (Q1 4.2%, Q2 5.1%, Q3 5.9%, Q4 5.4%).
  • 4
    SDF rate at 5.00% and MSF rate at 5.50% remain unchanged.
  • 5
    Decision announced by Governor Sanjay Malhotra; meeting held June 3–5, 2026.

Deep Dive

  • +
    The RBI has cut the repo rate by a cumulative 100 basis points since February 2025 before pausing.
  • +
    Core inflation forecast for FY27 was raised to 4.7% from 4.4%.
  • +
    The central bank also announced measures to support the rupee and dollar inflows.
Q

Exam Focus

What is the repo rate after the RBI's June 2026 MPC review, and what FY27 inflation figure did the RBI project?

Related Topics

Monetary PolicyRBIInflation

Exam Relevance & Angle

The repo rate and the RBI's inflation/growth projections are among the most frequently asked banking-exam current-affairs facts and directly shape lending rates across the economy.

Target Exams

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Background & Context

The repo rate is the rate at which the RBI lends short-term funds to commercial banks against government securities. The six-member MPC reviews it bi-monthly. The RBI had held the rate at 5.25% in February and April 2026 as well.

Related GK Concepts

Must Know
Repo rateMonetary Policy CommitteeCPI inflationSDF and MSFNeutral stance

Test Yourself

1 / 2

At its June 2026 review, the RBI kept the repo rate unchanged at:

Source

Business Standard

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RBI holds repo rate at 5.25%, keeps neutral stance; raises FY27 inflation forecast to 5.1% — Current Affairs 2026-06-05