Business EconomyPosted at: Jun 5 2026 3:24PM

New Delhi, June 5 (UNI): The Reserve Bank of India (RBI) on Friday kept the policy repo rate unchanged at 5.25 per cent and maintained its neutral monetary policy stance, while unveiling a series of measures aimed at attracting foreign capital and supporting long-term economic growth.
The decision was taken by the RBI's Monetary Policy Committee (MPC) amid growing global uncertainties, rising commodity prices and concerns over a possible monsoon shortfall that could put pressure on inflation.
Welcoming the move, PHD Chamber of Commerce and Industry (PHDCCI) said the central bank has struck a balance between supporting growth and keeping inflation under control. PHDCCI President Rajeev Juneja said that despite geopolitical tensions affecting global supply chains and economic activity, India's economy continues to remain resilient, backed by strong domestic demand and healthy corporate and banking sector fundamentals.
According to RBI projections, India's real GDP growth is expected to moderate to 6.9 per cent in FY2026-27 from an estimated 7.6 per cent in the previous fiscal year. While domestic demand remains supportive, higher energy costs, logistics disruptions and weather-related uncertainties are likely to weigh on economic activity.
The RBI has projected consumer price inflation at 4.6 per cent for FY2026-27, remaining within its target range. However, inflation risks have increased due to concerns over below-normal rainfall during the southwest monsoon season. The India Meteorological Department (IMD) has forecast monsoon rainfall at 90 per cent of the Long Period Average, indicating the possibility of below-normal rains across the country.
Alongside the policy decision, the RBI announced several initiatives to encourage foreign investment. These include expanding the scope of the Fully Accessible Route (FAR) for government securities, easing investment restrictions for Foreign Portfolio Investors (FPIs), increasing investment limits for Non-Resident Indians (NRIs) and Overseas Citizens of India (OCIs) in listed equities, and introducing concessional foreign exchange swap facilities for select foreign currency inflows.
The central bank has also restored the timeline for realization of export proceeds to nine months, a move expected to support trade and foreign exchange inflows.
PHDCCI CEO and Secretary General Dr. Ranjeet Mehta said the policy reflects a balanced assessment of the risks facing the economy. He noted that while external uncertainties have intensified, the RBI's continued focus on financial stability, growth and investment-friendly reforms will help sustain India's medium- and long-term growth prospects.
The policy signals the central bank's confidence in the economy's underlying strength while retaining the flexibility to respond to evolving inflation and growth dynamics in the months ahead.
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