The Reserve Bank of India (RBI) on Wednesday kept the benchmark repo rate unchanged at 5.25%, extending its pause for a fourth consecutive policy meeting as policymakers balanced rising headline inflation against still-benign underlying price pressures and resilient domestic growth.The six-member Monetary Policy Committee (MPC) unanimously retained its wait-and-watch approach amid persistent geopolitical uncertainties, volatile crude oil prices and emerging inflationary pressures.The committee also kept the Standing Deposit Facility (SDF) rate unchanged at 5%, while the Marginal Standing Facility (MSF) rate and Bank Rate remained at 5.5%.RBI MPC Live: Catch all the latest announcementsThe decision, announced by RBI Governor Sanjay Malhotra after the MPC's three-day meeting, marks another policy review since the RBI's last rate cut in December last year. While headline inflation has moved above the central bank's 4% medium-term target, Malhotra said the rise was largely driven by higher fuel prices and that broader price pressures remain contained.The RBI retained its neutral policy stance, noting that core inflation, excluding precious metals, continues to remain benign. Headline inflation, however, is expected to edge higher in the near term, the governor said.The central bank had left the repo rate unchanged in June after raising its FY27 retail inflation forecast to 5.1% from 4.6%, citing higher input costs due to the pass-through of elevated global energy prices to petrol and diesel. It had simultaneously lowered its FY27 GDP growth projection to 6.6% from 6.9%.The central bank's decision comes even as several Asian peers, including Indonesia and the Philippines, have raised borrowing costs to tackle higher energy prices and currency pressures. Instead of tightening policy, the RBI had announced a series of measures at its previous meeting to attract capital inflows and support the rupee.Retail inflation rose above the RBI's 4% target in June for the first time in 17 months, though it remains within the central bank's 2-6% tolerance band, giving policymakers room to keep rates unchanged. Meanwhile, economic activity has shown some signs of moderation, with the private sector Purchasing Managers' Index (PMI) slipping to a five-year low in July.Global uncertainty remains the key concernThe global backdrop remains uncertain, with recurring flare-ups in the West Asia conflict keeping markets on edge over the security of energy supplies.Apart from concerns around the Strait of Hormuz, policymakers have also been monitoring developments around the Bab el-Mandeb Strait and the Red Sea, both of which remain critical global shipping routes. Any disruption could increase freight costs and push up imported inflation.Crude oil prices have remained volatile amid geopolitical developments, although weaker Chinese crude demand and inventory drawdowns have moderated price pressures. Tariff-related uncertainties have also resurfaced globally, while several major central banks have been mulling policy tightening.Domestically, inflation risks have also increased. Food prices have started firming up due to seasonal factors and monsoon-related uncertainties, while economists continue to monitor the possibility of weather disruptions affecting agricultural output.Also Read: MPC's external members must have the courage to dissent, disagreement drives course correctionAt the same time, high-frequency indicators suggest domestic economic activity has remained resilient, with economists expecting India's GDP growth in the April-June quarter to remain in the 7.1-7.3% range.Analysts had largely pencilled in a pauseAhead of the policy decision, economists had overwhelmingly expected the MPC to maintain status quo, arguing that global uncertainty and inflation risks outweighed the case for any immediate policy action."The credit policy comes at a time when global uncertainty still exists and there is little clarity on when the war will end. Therefore, crude oil prices and currency will remain volatile and rather hard to conjecture,” said Madan Sabnavis, Chief Economist, Bank of Baroda.“At the same time, we have seen inflation inching upwards and it does look like that it will continue to move in the upward direction as food prices have started rising partly due to the season effects as well as monsoon,” he said.Sabnavis added, “Growth on the other hand, going by high frequency indicators, is steady. Against this background, the MPC is likely to maintain status quo on repo rate as well as the stance."Dipti Deshpande, Senior Director and Principal Economist, Crisil Ltd, also expected policymakers to wait for greater clarity before making any policy move."While the MPC may acknowledge emerging inflationary risks, we believe it will prefer to wait for greater clarity on the implications of two key shocks, namely the prolonged conflict in West Asia and ongoing monsoon uncertainties, for the growth-inflation dynamic. Both factors pose risks to the growth and inflation outlook, presenting policymakers with an increasingly delicate trade-off," Deshpande said.CareEdge Ratings had also projected no change in the repo rate, saying the central bank would prefer to assess evolving domestic and global developments before taking any fresh policy action.The agency said geopolitical risks remain elevated due to the unresolved conflict in West Asia, volatile crude oil prices, inflation risks arising from potential El Niño-related disruptions and higher global bond yields. It also said markets would closely watch the RBI's guidance on liquidity management as sustained foreign capital inflows could leave the banking system with surplus liquidity later in the financial year.