Reserve Bank of India maintains key rate unchanged, citing inflation risks and global supply chain disruptions.
The Indian Rupee (INR) edged lower against the US Dollar (USD) after the Reserve Bank of India (RBI) kept its Repo Rate steady at 5.25%, matching market expectations. The USD/INR pair traded marginally lower at 95.70 following the decision.
The RBI highlighted risks from prolonged global supply chain disruptions and elevated energy prices, which could pressure both inflation and economic growth. Despite this, the central bank noted that headline inflation remains below its target, while core inflation, excluding precious metals, is significantly lower.
RBI Governor Sanjay Malhotra indicated a cautious approach, stating the central bank will remain data-dependent and await clearer economic signals. The RBI also revised its retail inflation forecast for FY 2026-27 upward to 5.1% from the previous 4.6%.