RBI Holds Repo Rate at 6.5% Amid Global Uncertainty: What It Means for Businesses

In its Monetary Policy Committee (MPC) meeting held today, June 18, 2025, the Reserve Bank of India (RBI) announced that it will maintain the repo rate at 6.5%, marking the fifth consecutive time the rate has been held steady.

RBI Governor Shaktikanta Das emphasized the need to balance inflation containment with economic growth amid global economic slowdown and rising geopolitical tensions. The central bank also raised its FY25 GDP growth forecast to 7.2%, citing strong domestic demand and resilient services and manufacturing sectors.

For Indian businesses, this decision brings short-term borrowing stability but also signals caution against aggressive expansion. Sectors like real estate, MSMEs, and consumer finance will continue to operate under existing credit costs, while investors monitor upcoming global interest rate shifts closely.

“The RBI’s stance is clearly focused on stability and inflation targeting, which is wise in today’s volatile environment,” noted economist Dr. Neha Kapoor.

This move is expected to keep the Indian economy on a moderate growth path while shielding it from external shocks, especially with the US Fed and ECB still grappling with rate cut decisions.