India’s July CPI rose to 4.5% year-on-year, remaining within the RBI’s 2-6% band, supporting a pause in rate hikes.
India’s consumer price inflation climbed to 4.5% year-on-year in July, slightly above the 4.4% Bloomberg consensus but within the Reserve Bank of India’s 2-6% target range. Core inflation held steady at 3.9%, reinforcing expectations of policy stability.
Year-to-date inflation averaged 3.6%, below the RBI’s 4.0% midpoint target and its FY2026-2027 forecast of 5.0%. The central bank has signaled confidence in contained price pressures, with Governor Sanjay Malhotra stating inflation is “more or less under check.”
With FX reserves near USD693bn and reduced near-term inflation risks from improved monsoons and lower crude prices, the RBI is expected to maintain its neutral stance. A rate hike would require clearer evidence of second-round inflation effects.