The Reserve Bank of India's Monetary Policy Committee unanimously voted to hold the repo rate at 6% in its June 2026 meeting, citing improving inflation dynamics and a resilient growth trajectory. The decision was in line with market expectations and comes after two back-to-back rate cuts earlier in the fiscal year.
Governor Sanjay Malhotra noted that retail inflation had softened to 4.1% in April, well within the RBI's comfort zone of 2-6%. The central bank revised its FY27 GDP growth projection upward to 7.2% from 6.8%, reflecting strong domestic demand and robust manufacturing activity.
Markets reacted positively to the policy stance, with the Sensex gaining 400 points and the 10-year government bond yield easing to 6.82%. Analysts expect the RBI to remain on pause through at least September 2026 before reassessing based on monsoon outcomes and global factors.
