RBI Holds Interest Rates at 5.25% Amid Geopolitical Risks and Rising Oil Prices

The Reserve Bank of India (RBI) decided to maintain its benchmark repo rate at 5.25% during its latest policy meeting, meeting widespread market expectations. This decision was reached unanimously by all six members of the Monetary Policy Committee, who also opted to retain a "neutral" policy stance. The central bank highlighted that surging oil prices, driven by the ongoing conflict involving Iran, pose significant risks to the inflation outlook. Governor Sanjay Malhotra emphasized the need for vigilance against external shocks despite steady domestic growth. This cautious approach reflects the bank's priority to stabilize prices amid heightened geopolitical uncertainties. Consequently, financial markets reacted stably as the move had been largely priced in by investors and economists.