RBI MPC Meeting 2026 LIVE: Repo rate remains unchanged at 5.25%, says Governor Sanjay Malhotra

The Reserve Bank of India (RBI) maintained its repo rate at 5.25% during the June 2026 Monetary Policy Committee (MPC) meeting, led by Governor Sanjay Malhotra. The decision followed a series of rate adjustments in 2025, including a 50 basis points cut in June 2025 and a 25 basis points reduction in December 2025, with no changes in August, October 2025, or February and April 2026. Malhotra emphasized measures to curb forex volatility, including a 3-5 year Foreign Currency Non-Resident (FCNR) deposit window for banks until September 30, 2026. The RBI also announced incentives for external commercial borrowings (ECBs) by public sector undertakings (PSUs), extending the export proceeds realization period from 15 to 9 months. A 4-month concessional forex swap facility was introduced to stabilize market conditions. To attract foreign capital, the RBI expanded the universe of specified securities under the Foreign Portfolio Investor (FPI) route, adding 15, 18, and 40-year gilt issuances. Concentration limits on FPI debt investments were also removed. As of May 29, 2026, India’s forex reserves stood at $682.3 billion, covering 89% of external debt and providing an 11-month import cover. Foreign direct investment (FDI) flows reached $94 billion in April 2026, according to the RBI governor. The RBI revised its inflation outlook upward, projecting Consumer Price Index (CPI) inflation at 5.1% for FY27, up from the earlier estimate of 4.6%. Quarterly projections were also adjusted: Q1 at 4.2% (from 4%), Q2 at 5.1% (from 4.4%), Q3 at 5.9% (from 5.2%), and Q4 at 5.4% (from 4.7%). Core inflation remained stable at 3.7%, while high international crude prices—averaging $110 per barrel—posed an upside risk to the current account deficit (CAD) in FY27. Malhotra noted that financial system parameters remained healthy, though profitability showed moderation compared to the previous year. The RBI assured continued liquidity support, with credit growth from all sources at 4.5% (up from 4.1% last year). Policy transmission in credit markets had slowed in March-April, prompting the central bank to ensure adequate liquidity. Government cash balances and foreign exchange returns were expected to aid banking liquidity, while weighted average call rates stayed within the Liquidity Adjustment Facility (LAF) corridor.