India’s central bank likely to maintain current policy as inflation stays within its 2-6% target range for fiscal 2026-2027.
The Reserve Bank of India is projected to hold its benchmark rate at 5.25% as inflation remains stable at 5%, within its 2-6% target band. Growth is forecast at 6.7% for fiscal 2026-2027, down from 8% previously, but supported by strong domestic demand and exports.
FX reserves exceeding USD700bn provide the RBI with ample capacity to manage INR volatility. However, risks from higher oil and gold prices persist, though the central bank’s measures to attract foreign capital have bolstered stability.
The RBI is expected to remain in a wait-and-see mode, with no immediate policy shifts anticipated this year.