RBI MPC June 2026: Repo Rate Unchanged at 5.25%
The Reserve Bank of India kept the repo rate unchanged at 5.25% in its June 2026 MPC meeting and maintained a neutral stance, signaling caution amid global uncertainty and inflation risks. The decision reflects a balance between supporting growth and keeping price pressures under control.
What RBI decided
The MPC voted unanimously to keep the policy repo rate at 5.25%. The central bank also retained its neutral policy stance, which means it is not clearly leaning toward either tightening or easing at this stage.
RBI’s decision comes against the backdrop of geopolitical tensions, higher energy prices, supply-chain disruptions, and weather-related uncertainties. These factors made the case for a pause rather than a change in rates.
Five key takeaways
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Repo rate stays unchanged at 5.25%.
RBI chose stability over action, keeping borrowing costs steady for now. - Higher Investment Limits for NRIs and OCIs
- RBI Announces Measures to Attract Foreign Capital
Under the Fully Accessible Route (FAR), all new issuances of 15-year, 30-year, and 40-year government bonds will now be available to foreign investors.
In addition, the central bank announced:
- A concessional forex swap facility until September 30, 2026.
- Incentives for public sector firms raising external commercial borrowings.
- Support for banks mobilising FCNR(B) deposits.
- Restoration of the export proceeds realisation period to 9 months.
- GDP Growth Forecast Cut to 6.6%
The central bank lowered its FY27 GDP growth forecast to 6.6% from 6.9%.
Growth estimates for all 4 quarters were revised downward as global uncertainty, weak business sentiment, and trade disruptions continue to affect economic activity.
The RBI expects India to remain one of the fastest-growing major economies, but it has adopted a more cautious outlook due to external risks.
- RBI Raises Inflation Forecast for FY27
The RBI increased its inflation forecast for FY27 to 5.1% from the earlier estimate of 4.6%.
The upward revision reflects higher prices of commercial LPG, metals, plastics, rubber, and other industrial inputs.
The RBI expects inflation to remain elevated throughout the financial year:
- Q1 FY27: 4.2%
- Q2 FY27: 5.1%
- Q3 FY27: 5.9%
- Q4 FY27: 5.9%
Impact on borrowers and investors
For home loan, personal loan, and business loan borrowers, the immediate effect is a sense of relief from further rate hikes, but no near-term benefit from a cut. EMI pressure should remain broadly stable unless lending rates move for other reasons.
For investors, the pause may support stability in debt markets and keep expectations anchored. Equity markets may also interpret the decision as a sign that RBI is not rushing into tightening, even though inflation remains a concern.
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