Now Reading: RBI holds repo rate at 5.25%, raises FY27 growth forecast
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RBI holds repo rate at 5.25%, raises FY27 growth forecast
The Reserve Bank of India’s Monetary Policy Committee unanimously kept the repo rate at 5.25% and retained its neutral stance on Wednesday. It raised its FY27 growth forecast to 6.7% and projected…
The Story in Brief
The Reserve Bank of India’s Monetary Policy Committee unanimously kept the repo rate at 5.25% and retained its neutral stance on Wednesday. It raised its FY27 growth forecast to 6.7% and projected headline inflation at 5%, with food and fuel seen as the main pressures. RBI Governor Sanjay Malhotra cited an uneven monsoon, El Niño, West Asia tensions, trade uncertainty and volatile oil prices. The central bank said banking liquidity remained comfortable, with average surplus above Rs 1 lakh crore since June. India Inc CFOs broadly welcomed the pause, though some reported weaker demand because of higher cotton prices and weather risks.
The Indian Opinion
The lazy reading is that an unchanged rate means inflation is under control, while the alarmist version treats every monsoon or geopolitical risk as a trigger for a hike. Neither fits the evidence. The RBI sees supply-led pressure and resilient demand, but consumer goods companies may pass higher costs to shoppers. Rural spending will also depend on rainfall. The useful test is whether core inflation stays near the RBI’s 4.3% FY27 forecast as price increases reach stores.
Sources (6): cfo.economictimes.indiatimes.com, cfo.economictimes.indiatimes.com (2), government.economictimes.indiatimes.com, retail.economictimes.indiatimes.com, timesnownews.com, timesofindia.indiatimes.com
This story was synthesised by AI from the 6 sources linked above.
