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RBI keeps Repo Rate unchanged in June: What 5.25% means for the Indian Rupee

The Reserve Bank of India (RBI) decided to keep the Repo Rate unchanged at 5.25% after concluding the June monetary policy meeting on Friday. The decision aligned with the market expectations.

The Indian Rupee (INR) edges slightly lower in an immediate reaction to the RBI interest rate decision. However, the USD/INR pair remains in negative territory near 95.65, losing 0.05% on the day.

The local currency has been under pressure this year and has emerged as Asia's worst-performing currency in 2026. This has increased expectations that the Indian central bank may discuss measures to support the INR while keeping inflation under control.

The announcement came at a time when India faces many challenges, including a weakening currency, rising crude oil prices and inflation concerns linked to the ongoing conflict in the Middle East.

US Dollar Price Today

The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Australian Dollar.

USDEURGBPJPYCADAUDNZDCHF
USD-0.04%-0.03%-0.05%-0.03%0.09%0.03%-0.05%
EUR0.04%0.00%0.02%0.00%0.13%0.04%-0.00%
GBP0.03%-0.00%0.00%-0.01%0.12%0.05%-0.02%
JPY0.05%-0.02%0.00%0.00%0.13%0.06%-0.02%
CAD0.03%0.00%0.01%-0.01%0.12%0.06%-0.02%
AUD-0.09%-0.13%-0.12%-0.13%-0.12%-0.06%-0.16%
NZD-0.03%-0.04%-0.05%-0.06%-0.06%0.06%-0.09%
CHF0.05%0.00%0.02%0.02%0.02%0.16%0.09%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

RBI’s Governor Sanjay Malhotra key quotes

Over past few months, global economy shaped by uncertainty.

Indian economy entered episode of global turbulence with much fundamentals than previous episodes.

Important to confront, address these challenges.

Monetary policy has turned more cautious.

Risk of sentiments, safe haven demand imparting volatility to forex markets.

CPI inflation remains below target.

Impact of supply shock to weigh in Q4 onwards.

Outlook remains clouded due to sub-normal monsoon forecast, El Niño risks. 

Domestic demand resilient. 

Incipient signs of moderation in some segments.

Risks of higher inflation amplified.

Prudent to wait for greater clarity to emerge.

Risks to inflation, growth.

Food price outlook remains uncertain.

Will remain data dependent. 

Average oil prices would be substantially higher than what was assumed during last policy. 

FY27 CPI inflation view seen at 5.1% (previously at 4.6%). 

What do RBI Interest Rate decision mean for the Indian Rupee?

The Reserve Bank of India (RBI) Interest Rate Decision is one of the most important drivers of the Indian Rupee because it influences capital flows, inflation expectations, and economic growth prospects.

Higher interest rates could help strengthen the Indian Rupee and reduce inflationary pressures. At the same time, they can raise borrowing costs for businesses and consumers, which may affect economic growth and stock market valuations. On the other hand, a dovish stance or a rate cut from the RBI is seen as negative for the INR.

Technical Analysis: USD/INR maintains bullish tone in near term

Chart Analysis USD/INR

In the daily chart, USD/INR keeps a constructive near-term bias as spot holds comfortably above the 100-day simple moving average and the lower Bollinger Band. The pair is, however, trading just under the Bollinger middle band, while the Relative Strength Index (RSI) at 54.10 has eased back toward neutral territory, suggesting the recent bullish momentum is moderating rather than reversing.

On the topside, immediate resistance is located at the Bollinger middle band near 95.75, with further gains likely to encounter a stronger cap at the upper Bollinger Band around 96.65. On the downside, initial support is seen at the lower Bollinger Band at 94.88, ahead of more solid, medium-term support at the rising 100-day SMA near 93.12, which should underpin the broader uptrend while it holds.

(The technical analysis of this story was written with the help of an AI tool.)

Economic Indicator

RBI Interest Rate Decision (Repo Rate)

The RBI Interest Rate Decision is announced by the Reserve Bank of India. If the bank is hawkish about the inflationary outlook of the economy and rises the interest rates, it is seen as positive, or bullish, for the INR, while a dovish outlook for the economy (or a rate cut) is seen as negative, or bearish, for the currency.

Read more.

Last release: Wed Apr 08, 2026 04:30

Frequency: Irregular

Actual: 5.25%

Consensus: 5.25%

Previous: 5.25%

Source: Reserve Bank of India

RBI FAQs

The role of the Reserve Bank of India (RBI), in its own words, is "..to maintain price stability while keeping in mind the objective of growth.” This involves maintaining the inflation rate at a stable 4% level primarily using the tool of interest rates. The RBI also maintains the exchange rate at a level that will not cause excess volatility and problems for exporters and importers, since India’s economy is heavily reliant on foreign trade, especially Oil.

The RBI formally meets at six bi-monthly meetings a year to discuss its monetary policy and, if necessary, adjust interest rates. When inflation is too high (above its 4% target), the RBI will normally raise interest rates to deter borrowing and spending, which can support the Rupee (INR). If inflation falls too far below target, the RBI might cut rates to encourage more lending, which can be negative for INR.

Due to the importance of trade to the economy, the Reserve Bank of India (RBI) actively intervenes in FX markets to maintain the exchange rate within a limited range. It does this to ensure Indian importers and exporters are not exposed to unnecessary currency risk during periods of FX volatility. The RBI buys and sells Rupees in the spot market at key levels, and uses derivatives to hedge its positions.

Author

Lallalit Srijandorn

Lallalit Srijandorn is a Parisian at heart. She has lived in France since 2019 and now becomes a digital entrepreneur based in Paris and Bangkok.

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