Now Reading: RBI holds repo rate at 5.25% for third straight meeting
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RBI holds repo rate at 5.25% for third straight meeting
RBI holds repo rate at 5.25% for third straight meeting
The Reserve Bank of India kept its policy repo rate unchanged at 5.25% on Wednesday and retained a neutral stance, with the Monetary Policy Committee voting unanimously. RBI Governor Sanjay Malhotra said…
The Story in Brief
The Reserve Bank of India kept its policy repo rate unchanged at 5.25% on Wednesday and retained a neutral stance, with the Monetary Policy Committee voting unanimously. RBI Governor Sanjay Malhotra said resilient domestic demand supported growth, while renewed West Asia tensions, higher energy prices and El Niño posed risks.
The RBI raised its FY27 growth forecast to 6.7% from 6.6%, but lowered its inflation projection to 5% from 5.1%. June retail inflation rose to 4.38%, above the RBI’s 4% target. Malhotra said the increase, driven by food and fuel, was not broad-based and could peak in the third quarter before easing. The rupee has fallen about 7% this year.
The Indian Opinion
The lazy reading is that the RBI has ignored inflation, while the opposing exaggeration is that one breach of the 4% target demands an immediate hike. Neither fits the data. The RBI is balancing a narrow June inflation rise against resilient demand, oil risks and uncertain food prices. Its neutral stance leaves room to move, but credibility will depend on whether inflation peaks as forecast and returns towards 4% without a sharp growth hit.
Sources (2): livemint.com, hindustantimes.com
This story was synthesised by AI from the 2 sources linked above.
Updated: this story now draws on 2 sources.
