Announcing the third bi-monthly monetary policy for the current fiscal, RBI Governor Sanjay Malhotra said the Monetary Policy Committee (MPC) has unanimously decided to retain short-term lending rate or repo rate at 5.25 per cent with a neutral stance. The interest rate pause comes even as the Consumer Price Index (CPI) based headline retail inflation has crossed the RBI’s medium-term target of 4 per cent at 4.38 per cent in June. However, RBI marginally raised the growth forecast to 6.7 per cent while lowering inflation projection to 5 per cent for the current fiscal. Additionally, the rupee has been depreciating continuously since the beginning of this year. It has depreciated about 7 per cent so far in 2026 and is down roughly 6 per cent since the outbreak of the Iran conflict in late February.