MUMBAI, June 5 -- The Reserve Bank of India's rate-setting panel on Friday unanimously kept the repo rate unchanged at 5.25% and retained its "neutral" stance, despite a sharp depreciation in the rupee and repeated fuel price hikes amid the conflict in West Asia. The decision was widely in line with market expectations.

A Mint poll of 10 economists and market participants had pointed to rising inflation risks and a weakening growth outlook, with all respondents expecting the central bank's Monetary Policy Committee (MPC) to keep rates on hold while signalling a more cautious policy approach.

The RBI cut the repo rate-the rate at which it lends short-term funds to banks-by a cumulative 125 basis points (bps) in 2025, including a final 25...