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RBI MPC Holds Repo Rate at 5.25% Amid CPI 3.48%, West Asia Conflict Threatens FY27 Growth

EconomyCORE
Target:UPSC GS-IIIMPSCBankingSSC GATeachingPrelims HighMains MediumStatic GK Link
31 May 2026
~2 min
Source: Indian Express
Key Data:Repo rate 5.25%CPI inflation 3.48%WPI inflation 8.3%FY27 GDP growth forecast 6.7%Core inflation 2.1%Fuel price hike Rs 7.5/litre
Bodies:RBIMPCDBS BankCareEdge RatingUS Federal ReserveBank of JapanReserve Bank of New ZealandReserve Bank of AustraliaBank IndonesiaCentral Bank of PhilippinesECB
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What This Article Covers

1.RBI MPC expected to hold repo rate at 5.25% on June 5, focusing on growth support over inflation.

2.CPI inflation at 3.48% (April) below 4% target provides room for pause; FY27 inflation forecast may rise to 4.6-5.0%.

3.West Asia conflict threatens growth (6.7% forecast) via oil price shocks (~$90-$110) and supply chain disruptions.

The Big Picture
Prelims · HighMains · Medium

The RBI Monetary Policy Committee (MPC) is likely to maintain the repo rate at 5.25% in its June meeting despite inflationary risks from West Asia conflict and rising oil prices. The decision hinges on CPI inflation remaining below target at 3.48% and the need to support growth, which may be revised down to 6.7% in FY27.

Exam Lens

Quick Exam Facts From News

Repo Rate5.25% (unchanged since April)
April CPI Inflation3.48%
RBI Inflation Target4% (medium-term)
FY27 GDP Growth Forecast6.7% (CareEdge, assuming $90 oil)
April Core Inflation2.1% (excl. precious metals)
April WPI Inflation8.3%
West Asia Conflict Impact on CPIDirect impact ~35 bps, indirect 10-15 bps
Fuel Price HikeRs 7.5/litre increase

1-Minute Revision

  • ›Repo Rate: 5.25% (unchanged since April)
  • ›April CPI Inflation: 3.48%
  • ›Target this Data: April CPI Inflation at 3.48% and Repo Rate at 5.25%.
  • ›Target this Nodal Body: RBI Monetary Policy Committee (MPC).
  • ›Target this Legal Point: RBI's mandate to maintain CPI inflation at 4% (medium-term target).

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Practice exam-style questions, track your score, and strengthen your recall.

Q1Static LinkageEasy

Which committee is responsible for setting the repo rate in India?

Q2Statement-basedHard

Consider the following statements regarding the economic scenario discussed in the article:

1. The RBI has kept the repo rate unchanged at 5.25% since its April policy review.

2. Headline CPI inflation in April 2026 was 3.48%, which is above the RBI's medium-term target of 4%.

3. The West Asia conflict is expected to have a direct impact of around 35 basis points on headline CPI inflation.

Which of the statements given above is/are correct?

Q3Data-centricMedium

According to the article, what was the Wholesale Price Index (WPI) inflation rate for April 2026?

Q4Application/ImpactMedium

What is the primary reason cited in the article for the RBI MPC likely deferring a rate hike in its June meeting?

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