The Monetary Policy Committee (MPC) met on April 6, 7, and 8 to deliberate on the policy repo rate. After a detailed assessment of evolving macroeconomic and financial conditions, as well as the broader outlook, the MPC unanimously decided to keep the policy repo rate under the Liquidity Adjustment Facility (LAF) unchanged at 5.25%.
Accordingly, the Standing Deposit Facility (SDF) rate remains at 5.00%, while the Marginal Standing Facility (MSF) rate and the Bank Rate continue at 5.50%. The MPC also chose to maintain its neutral stance, signaling a balanced approach between growth and inflation management.
Inflation Trends
Headline inflation remained below the target in January and February, coming in at 2.7% and 3.2%, respectively. Food inflation saw a pickup after four months of deflation, while fuel inflation stayed modest.
Core inflation stood at 3.7%, indicating subdued underlying price pressures. Notably, core inflation excluding precious metals was even lower at 2.1%, highlighting a broadly benign inflation environment.
Growth Outlook
As per the updated GDP series (base year 2022–23), real GDP growth for FY 2025–26 is estimated at a robust 7.6%, reflecting continued economic resilience.
Updated RBI Policy Rates
| Instrument | Rate |
| CRR | 3.00% |
| SLR | 18% |
| Repo Rate | 5.50% |
| SDF | 5.25% |
| Reverse Repo Rate* | 3.35% |
| Bank Rate | 5.75% |
| MSF Rate | 5.75% |
*The reverse repo rate remains part of the RBI’s toolkit but is currently not actively used.
About the Standing Deposit Facility (SDF)
Introduced in April 2022, the Standing Deposit Facility (SDF) serves as the effective floor of the policy rate corridor. It allows banks to park excess funds with the RBI without the need for collateral, helping absorb surplus liquidity and support inflation control.
While the reverse repo rate still exists as a policy instrument, its role has diminished in the current framework, making the SDF the more relevant operational tool.
