RBI Monetary Policy Committee Holds Repo Rate at 5.25%: Key Takeaways from the 61st MPC Meeting Minutes (June 3–5, 2026)

Overview

The Reserve Bank of India's Monetary Policy Committee convened its 61st meeting between June 3 and 5, 2026, under the chairmanship of Governor Shri Sanjay Malhotra. Following a comprehensive review of evolving macroeconomic conditions — both domestic and global — all six members of the Committee voted unanimously to hold the policy repo rate under the Liquidity Adjustment Facility (LAF) at 5.25 per cent, while continuing with the neutral monetary policy stance.

The meeting was attended by Dr. Nagesh Kumar, Shri Saugata Bhattacharya, Prof. Ram Singh, Dr. Poonam Gupta, and Shri Indranil Bhattacharyya, in addition to the Governor. The proceedings were conducted in accordance with Section 45ZL of the Reserve Bank of India Act, 1934, which mandates publication of MPC minutes within fourteen days of each meeting. The minutes were accordingly released on June 19, 2026.

Consequent to the decision on the repo rate:

• The Standing Deposit Facility (SDF) rate remains at 5.00 per cent
• The Marginal Standing Facility (MSF) rate and Bank Rate remain at 5.50 per cent

Institutional and Statutory Background

The MPC was constituted under Section 45ZB of the Reserve Bank of India Act, 1934. Per Section 45ZL of the same Act, the Reserve Bank is obligated to publish, no later than the fourteenth day after every MPC sitting, the complete minutes of proceedings, which must include:

• The resolution adopted at the meeting
• Each member's individual vote on the said resolution
• Individual statements by each member under sub-section (11) of Section 45ZI of the Reserve Bank of India Act, 1934

Resolution Adopted by the MPC

After extensive deliberations on macroeconomic projections — drawing upon staff analysis, survey inputs, and stakeholder consultations — the Committee adopted a resolution to maintain the status quo on the policy rate, citing heightened global uncertainty as the primary basis for restraint.

Voting Record

Macroeconomic Assessment

Global Environment

The prolongation of the West Asia conflict, without any meaningful diplomatic resolution, has materially worsened the international economic backdrop since the April 2026 policy meeting. Key developments noted by the Committee include:

• Crude oil markets remain severely disrupted; global energy prices have remained elevated and volatile
• Supply chains continue to face significant disruptions, with normalisation timelines uncertain
• Major advanced economy central banks are increasingly leaning toward monetary tightening
• Global equity markets remain buoyant, driven by artificial intelligence optimism, while sovereign bond yields have hardened due to fiscal sustainability concerns
• The US Dollar Index has strengthened amid shifting interest rate expectations and evolving risk sentiment

Domestic Growth Outlook

Despite the external headwinds, domestic economic activity has demonstrated considerable resilience:

• Private consumption has remained robust, with FY26 growth recorded at 7.7% year-on-year
• Fixed investment has maintained momentum even under cost pressures
• Merchandise exports recorded strong growth in April 2026, though elevated freight and insurance costs continue to act as a drag
• Services exports have continued to perform well
• High-frequency indicators such as FMCG sales, passenger vehicle sales, tractor sales, credit card spending, and household credit growth continue to reflect domestic demand stability
• Capacity utilisation across manufacturing stood at 75.2% in Q4 FY26, exceeding the long-term average of 74.0%

However, early signs of moderation are becoming visible in some sectors, and broader private capital expenditure has been dampened by heightened geopolitical uncertainty.

Real GDP growth for 2026-27 is projected at 6.6 per cent, with the following quarterly distribution:

• Q1: 6.6%
• Q2: 6.3%
• Q3: 6.5%
• Q4: 6.8%

This represents a reduction of approximately 100 basis points from the FY26 growth rate of 7.6% (second advance estimates) and a trimming of 30 basis points from the April 2026 MPC projection of 6.9%.