The Reserve Bank of India (RBI) on Friday kept the benchmark repo rate unchanged at 5.25%, citing heightened global uncertainties, rising crude oil prices and inflation risks, while lowering its economic growth forecast for 2026-27.
The Monetary Policy Committee (MPC) unanimously decided to maintain the policy rate and retain its neutral stance. The central bank revised its GDP growth projection for the current financial year to 6.6%, down from 6.9% estimated earlier.
At the same time, the RBI raised its retail inflation forecast for 2026-27 to 5.1% from 4.6%, pointing to elevated energy prices, supply-chain disruptions and uncertainty surrounding the south-west monsoon.
The central bank said prolonged geopolitical tensions in West Asia, volatility in global commodity markets and weather-related risks have increased challenges for both growth and inflation. Rising crude oil prices remain a key concern for India, which imports a large share of its energy requirements.
The RBI noted that while domestic demand remains resilient, global supply-chain disruptions and financial market volatility continue to pose downside risks to economic activity.
Market participants reacted cautiously to the policy decision, with investors assessing the implications of slower growth and higher inflation on corporate earnings and economic sentiment. Meanwhile, the central bank announced measures aimed at supporting foreign capital inflows and stabilising the rupee amid external pressures.
Economists said the policy reflects the RBI’s effort to balance inflation management with the need to support economic growth at a time of increasing global and domestic uncertainty.
Source: RBI Monetary Policy Committee statement; media reports.
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