RBI holds repo rate at 5.25%

The State Bank of India's Monetary Policy Committee, led by Governor Sanjay Malhotra, unanimously decided to keep the policy repo rate unchanged at 5.25% for the fourth consecutive meeting, retaining a 'neutral' stance. The central bank marginally raised India's economic growth forecast for the current financial year to 6.7% from 6.6%, citing resilient domestic demand, manufacturing, and services activity. Annual inflation estimates were lowered, reflecting an optimistic view, though future policy action would depend on data. The decision came amid global uncertainties, including the Iran conflict and elevated crude oil prices, which have increased inflationary risks. Market participants widely expected the pause, focusing on domestic inflation and growth. Following the announcement, the S&P BSE Sensex closed 152.05 points higher at 78,581, while the NSE Nifty edged up 9.75 points to 24,624.65, after a volatile session partly due to the new Closing Auction Session mechanism for F&O stocks. Foreign Institutional Investors bought equities worth Rs 2,446.47 crore on Tuesday. Experts noted that the RBI's policy would be guided primarily by domestic conditions, with potential rate hikes later if crude oil prices remain elevated.