- RBI kept repo rate steady at 5.25% and maintained a neutral policy stance
- RBI reduced FY26 GDP growth forecast to 7.6% and projected 6.9% growth for FY27
- Inflation projected at 4.6% for FY27 with oil prices posing key upside risk
The Reserve Bank of India (RBI) on Wednesday kept interest rates unchanged and reaffirmed its neutral policy stance, while signalling confidence in the country's growth momentum even as it warned of rising global risks to inflation, liquidity and financial stability.
Here are the five key highlights from the policy announcement.
Key Rates Unchanged
The Monetary Policy Committee (MPC) unanimously voted to retain the repo rate at 5.25%, in line with market expectations. The Standing Deposit Facility (SDF) rate remains at 5%, while the Marginal Standing Facility (MSF) rate was kept unchanged at 5.5%.
No Stance Change
Maintaining a neutral stance, the central bank emphasised the need to remain agile amid heightened uncertainty in global financial markets. The RBI flagged risks from safe‑haven flows, volatile crude prices and adverse spillovers from global tightening cycles, which could affect domestic liquidity conditions and push up borrowing costs.
Growth Outlook Strengthened
Reflecting resilience in economic activity, the RBI raised its real GDP growth estimate for FY26 to 7.6%, up from 7.3% earlier. For FY27, growth is projected at 6.9%, supported by sustained momentum in manufacturing and services.
On a quarterly basis, the central bank expects growth of 6.8% in Q1, 6.7% in Q2, 7% in Q3 and 7.2% in Q4 of FY27. The RBI noted that leading indicators continue to point to robust demand conditions, while services exports are likely to remain resilient, offering support against global headwinds.
GDP projection for FY27
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Inflation: Oil Remains a Key Risk
The RBI projected CPI inflation at 4.6% for FY27, broadly aligned with its medium‑term target. Quarterly inflation is expected at 4% in Q1, 4.4% in Q2, rising to 5.2% in Q3, before easing to 4.7% in Q4.
Governor Sanjay Malhotra said the central bank will continue to publish core inflation forecasts going forward, underlining its focus on durable price stability. However, he cautioned that elevated crude oil prices could fuel inflationary pressures and widen the current account deficit (CAD), posing a key upside risk to the outlook.
CPI projection
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ALSO READ: Central Bank Pegs FY27 CPI Inflation Projection At 4.6% Amid Risk Outlook
Rupee Policy: Volatility, Not Levels
Commenting on currency movements, Governor Malhotra acknowledged that the rupee has depreciated over the past year, reiterating that the RBI's intervention in the foreign exchange market is aimed solely at managing volatility, not targeting any specific exchange rate level.
To curb speculative activity and improve market discipline, the RBI had recently introduced tighter regulatory measures, including a $100 million cap on banks' net open positions, limits on non‑deliverable forward (NDF) trading, and a ban on rebooking cancelled contracts.
Overall, the RBI's policy message underscored confidence in domestic growth fundamentals, while reinforcing its commitment to maintaining macroeconomic and financial stability in an uncertain global environment.
ALSO READ: RBI MPC Meeting Live: Repo Rate Unchanged; Governor Says Inflation Risks Linger Amid Gulf Conflict
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