RBI keeps repo rate unchanged third time in a row amid West Asia crisis

Mumbai, Aug 5 (PTI) In an expected move, the Reserve Bank of India on Wednesday kept key interest rates unchanged for the third time in a row as it weighed the impact of uncertain energy prices and supply disruptions caused by the ongoing West Asia crisis.

Announcing the third bi-monthly monetary policy for the current fiscal, RBI Governor Sanjay Malhotra said the Monetary Policy Committee (MPC) has unanimously decided to retain short-term lending rate or repo rate at 5.25 per cent with a neutral stance.

The interest rate pause comes even as the Consumer Price Index (CPI) based headline retail inflation has crossed the RBI's medium-term target of 4 per cent at 4.38 per cent in June.

However, RBI marginally raised the growth forecast to 6.7 per cent while lowering inflation projection to 5 per cent for the current fiscal.

Additionally, the rupee has been depreciating continuously since the beginning of this year. The rupee has been hovering between 95 and 96 against the dollar.

Once considered among Asia's more stable currencies, the rupee has now become one of the worst-performing emerging market currencies this year, pressured by a mix of expensive oil, capital outflows, widening trade deficits and a surging US dollar.

It has depreciated about 7 per cent so far in 2026 and is down roughly 6 per cent since the outbreak of the Iran conflict in late February. PTI