The Reserve Bank of India held its repo rate at 5.25% while lowering growth targets and raising inflation projections due to energy market volatility. Policymakers simultaneously introduced measures to support the Balance of Payments and the INR.
Key Takeaways
- 1.The RBI kept the repo rate unchanged at 5.25%, with the authors shifting their expectations for a rate hike to August 2026.
- 2.The RBI lowered its GDP growth forecast to 6.6% for FY27 and raised CPI inflation projections to 5.1%.
- 3.New measures to support balance of payments (BoP) and the INR include liberalizing the sovereign bond market and incentivizing capital inflows.
Table of Contents
- Monetary policy decision
- Economic projections
- BoP measures
- Our take
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Authors
Dhiraj NimKhoon Goh
Themes
Inflationary pressure from energy shocksBalance of Payments support
Regions
Asia PacificIndia