Mumbai, Feb. 7 -- The monetary policy committee of the Reserve Bank of India (RBI) on Friday retained the repo rate at 5.25%, taking a pause after a 25 basis points (bps) cut in the December meeting. A Mint poll of 10 economists showed that nine of the 10 respondents expect a pause at 5.25%, while one anticipated a 25-bps cut to 5%. One basis point is a hundredth of a percentage point. The MPC also held its stance at neutral, a move that allows it to move in either direction depending on incoming data. "Overall, the near-term domestic inflation and growth outlook remain positive," said RBI governor Sanjay Malhotra. "Headline inflation during November and December remained below the tolerance band of the inflation target." He said that the outlook for retail inflation in Q1 and Q2 of next financial year (FY27) is at 4% and 4.2%, respectively, revised slightly upwards, but remains benign and near the inflation target. The central bank also revised its growth projections marginally higher, with GDP growth for Q1 and Q2 of FY27 now seen at 6.9% and 7%, respectively. "The slight upward revision in the inflation outlook is primarily due to increase in prices of precious metals, which contribute about 60 to 70 basis points. The underlying inflation continues to be low. On the growth front, economic activity remains resilient," said Malhotra. According to Malhotra, the first advance estimates suggest continuing growth momentum, driven by domestic factors amidst a challenging external environment. The Indian economy posted a surprising six-quarter high growth rate of 8.2% in the quarter ended September, significantly higher than the RBI's 7% projection. India's retail inflation, as measured by the Consumer Price Index, stood at 1.33% in December, up from 0.71% in November. Under the flexible inflation targeting framework, the Monetary Policy Committee (MPC) targets retail inflation at 4% with a tolerance band of +/-2%. The India-US trade deal that promises 18% tariffs instead of the present 50% has come as a relief for the central bank as it reduces the pressure on the currency. The rupee is now even expected to gradually move back to 90-levels after touching 92 recently. "Based on a comprehensive review of the domestic macroeconomic conditions and outlook, the MPC therefore was of the view that the current policy rate is appropriate and accordingly it voted to continue with the existing policy rate," said Malhotra. The MPC has three external members Nagesh Kumar, Saugata Bhattacharya, and Ram Singh, while the remaining three include the governor Sanjay Malhotra, deputy governor Poonam Gupta, and executive director Indranil Bhattacharyya. In December, the RBI had cut the repo rate by 25 bps, citing a "rare goldilocks period" where growth remains robust and inflation benign, surprising a section of the market that expected a pause....