The Reserve Bank of India (RBI) has kept the repo rate unchanged at 5.25% and retained its neutral policy stance in the June 2026 Monetary Policy Committee (MPC) meeting.
RBI Governor Sanjay Malhotra said the central bank remains cautious due to rising geopolitical tensions, supply chain disruptions, and uncertainty in global markets. However, he added that India's economy remains resilient and is better prepared to handle external shocks.
The MPC unanimously decided to keep the repo rate at 5.25% and maintain a neutral stance.
The RBI said uncertainties related to global conflicts, trade disruptions, and supply chain challenges continue to pose risks to the economy. Given these factors, the central bank believes it is appropriate to wait for more clarity before making any policy changes.
Other key rates also remain unchanged:
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:
Despite the increase in projections, the RBI noted that retail inflation remains below its 4% target level for now, with CPI inflation recorded at 3.4% in March and 3.5% in April.
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.
The RBI announced higher investment limits for Non-Resident Indians (NRIs) and Overseas Citizens of India (OCIs).
The revised framework will allow NRIs and OCIs to invest more in listed Indian equities without requiring registration with the Securities and Exchange Board of India (SEBI).
The move is aimed at encouraging greater participation from overseas Indians in India's capital markets.
The central bank unveiled several steps to encourage foreign investment and support government borrowing.
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.
The RBI also relaxed certain investment restrictions for Foreign Portfolio Investors (FPIs), making it easier for them to invest in Indian debt markets.
In addition, the central bank announced:
These measures are expected to improve foreign capital inflows and strengthen India's financial markets.
Read More: RBI Launches FY26 Surveys on Mutual Fund Global Exposure and IT Services Exports!
The RBI's June 2026 policy reflects a cautious but balanced approach. While the central bank kept interest rates unchanged to support stability, it raised inflation projections and lowered growth forecasts due to global uncertainties. At the same time, the RBI introduced several measures to attract foreign investment and strengthen economic resilience, signalling its focus on maintaining stability in a challenging global environment.
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Published on: Jun 5, 2026, 2:28 PM IST
Kusum Kumari
Kusum Kumari is a Content Writer with 4 years of experience in simplifying financial market concepts. Currently crafting insightful content at Angel One, She specialise in breaking down complex topics into easy-to-understand pieces, blending expertise in market fundamentals and technical analysis.
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