Reserve Bank of India maintains neutral stance, cuts FY2026-2027 inflation outlook to 5.0% and raises growth forecast to 6.7%.
The Reserve Bank of India left its policy repo rate unchanged at 5.25% for a fourth consecutive meeting, aligning with market expectations. The Monetary Policy Committee retained a neutral stance, citing the need for clearer inflation signals before adjusting policy further.
Despite June CPI rising to 4.4% year-over-year, the RBI attributed the increase to supply-side factors with minimal pass-through to core inflation. The central bank lowered its FY2026-2027 inflation forecast to 5.0% from 5.1% and upgraded its growth projection to 6.7% from 6.6%, supported by domestic demand and government policies.
USD/INR dipped to 95.10 amid lower oil prices and strong capital inflows, though the rupee remains one of Asia’s weakest currencies in 2024. The RBI’s cautious approach contrasts with regional peers that have tightened policy this year.