The Reserve Bank of India maintained its key policy rate at 5.25 per cent, projecting sustained economic momentum as domestic equity benchmarks settled higher on Wednesday.

By DW Pulse | MUMBAI โ€” 5 August 2026 โ€” The Reserve Bank of India (RBI) Monetary Policy Committee unanimously voted to keep the key repo rate unchanged at 5.25 per cent on Wednesday, reaffirming its neutral stance as the nation remains the world’s fastest-growing major economy. The central bank decision boosted investor confidence on Dalal Street, driving the benchmark BSE Sensex up by 152.05 points to close at 78,581.00, while the NSE Nifty 50 rose 9.75 points to settle at 24,624.65.

Key Highlights

  • RBI Monetary Policy Committee unanimously maintains key repo rate at 5.25% with a neutral stance.
  • RBI Governor Sanjay Malhotra notes resilient domestic demand continues to drive India’s growth trajectory.
  • BSE Sensex gains 152.05 points (+0.19%) to 78,581.00, supported by gains in automobile and cement stocks.

RBI Repo Rate Kept Steady Amid Growth Resilience

The Reserve Bank of India decided to hold the policy borrowing rate steady following a comprehensive three-day review by the Monetary Policy Committee, according to official statements from the central bank. RBI Governor Sanjay Malhotra emphasized that economic activity across manufacturing and services remains robust, backed by strong private consumption and infrastructure capital expenditure.

Central bank officials indicated that while headline inflation is projected to peak in the third quarter due to seasonal food prices and global crude oil fluctuations, inflation expectations remain firmly anchored.

Stock Market Advances Following Rate Pause

Domestic financial markets responded positively to the interest rate decision, with sector indices witnessing steady buying momentum across trading sessions, according to official exchange trading data. Auto and cement counters led the afternoon market advance, with UltraTech Cement advancing 2 per cent, followed by NTPC rising 1.8 per cent and Mahindra & Mahindra gaining 1.7 per cent.

State Bank of India added 1.7 per cent in active trading, while telecom major Bharti Airtel gained 0.3 per cent following its latest quarterly financial disclosures.

Global Macro Cues and Market Outlook

Broader market sentiments were additionally supported by stabilizing international oil prices and ongoing diplomatic discussions regarding maritime passage in the Strait of Hormuz. Information technology stocks witnessed selective profit-taking, with Tata Consultancy Services down 1.2 per cent and HCL Technologies declining 1.1 per cent.

The Reserve Bank maintained its projection for GDP growth, reaffirming that India’s macroeconomic fundamentals remain exceptionally strong relative to peer emerging markets.