RBI keeps key policy rates unchanged, lowers its inflation projection

The Story in Brief

The Reserve Bank of India on Wednesday kept key policy interest rates unchanged, holding the policy repo rate at 5.25%. The standing deposit facility (SDF) rate remains at 5.0%, while the marginal standing facility (MSF) rate and the Bank Rate are unchanged at 5.50%. The monetary policy committee also maintained a neutral stance, leaving the option to raise or lower rates depending on evolving conditions. Governor Sanjay Malhotra said the MPC will keep a close watch to align inflation with the target. The RBI revised its FY27 consumer price inflation forecast down by 10 basis points to 5.0% from 5.1% and marginally raised GDP growth to 6.7% from 6.6%. Quarterly CPI projections are 4.7% for July-September, 5.9% in Q3 and 5.5% in Q4. The bank cited easing crude prices but warned of risks from an uneven south‑west monsoon, El Niño, geopolitics and global trade policy. Analysts expect the policy stance to remain unchanged in October, while views differ on later moves.

The Indian Opinion

Commentary around this decision includes both cautious expectations of a continued neutral stance and forecasts of future hikes. Readers should note the RBI’s explicit emphasis on monitoring inflation and its view that recent pressure is supply‑driven, not broad‑based, which supports a wait‑and‑watch approach. Where analysts diverge-some predicting continued status quo, another forecasting a 50 basis‑point hike later-those are conditional scenarios tied to risks such as food and fuel shocks, monsoon variability and global developments. Given those uncertainties, neither a guaranteed cut nor a definite hike can be assumed from this single set of projections.

Original article: No change to key policy rates; RBI lowers inflation projection (www.deccanherald.com)

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