The RBI held rates and its neutral stance as expected, signalling confidence in domestic growth while flagging rising external headwinds.

• The Reserve Bank of India held policy steady as expected, with the MPC unanimously keeping the repo rate at 5.25%.

• SDF (standing facility rate) rate, which is the floor of the monetary policy corridor, unchanged at 5.00%

• The RBI retained a neutral policy stance, signalling comfort with current settings after aggressive easing.

• Officials said underlying inflation remains low, while near-term growth and inflation outlooks stay positive.

• External headwinds have intensified since the last meeting, but domestic fundamentals are seen as resilient.

• The Indian rupee was little changed after the decision, reflecting a well-telegraphed outcome.

The Reserve Bank of India kept monetary policy unchanged on Friday, striking a steady tone on growth and inflation while acknowledging rising external risks.

The RBI’s monetary policy committee voted unanimously to hold the repo rate at 5.25%, with the central bank also leaving the marginal standing facility rate at 5.50% and the standing deposit facility rate at 5.0%. The MPC retained its neutral policy stance, signalling that current settings remain appropriate after a prolonged easing cycle.

In his remarks, the RBI governor said the Indian economy remains on a steadily improving trajectory, with domestic growth momentum intact despite a more challenging global backdrop. Underlying inflation was described as continuing to run low, giving policymakers room to stay on hold even as uncertainty abroad has picked up.

The central bank acknowledged that external headwinds have intensified since the last policy meeting, reflecting global financial conditions and lingering geopolitical and trade-related risks. Even so, officials said the near-term outlook for domestic inflation and growth remains positive, underpinned by solid demand and favourable inflation dynamics.

Markets took the decision in stride. The Indian rupee traded near unchanged against the US dollar following the announcement, reflecting broad consensus around the rate hold and limited surprises in the policy message. Bond markets also showed little reaction, with investors focused more on the RBI’s forward guidance than the headline decision.

With inflation expected to stay around or below the RBI’s 4% target and growth holding up, the policy signal suggests an extended pause ahead. Attention now shifts to how persistent external pressures become, and whether global financial conditions eventually force a reassessment of the RBI’s neutral stance later in the year.