Inflation Risks and Global Uncertainty Prompt RBI to Hold Rates

The Reserve Bank of India Monetary Policy Committee (MPC) has unanimously decided to keep the policy repo rate unchanged at 5.25 per cent, citing rising global uncertainties and inflationary pressures.

The six-member committee, which met recently under the chairmanship of Sanjay Malhotra, also retained its neutral policy stance to maintain flexibility in responding to changing economic conditions.

The MPC noted that India’s domestic economic growth continues to remain resilient. However, it cautioned that global developments such as the West Asia conflict, supply chain disruptions, and increasing energy prices could impact both growth momentum and inflation trends.

According to the committee’s projections, India’s GDP growth for 2026-27 is expected at 6.9 per cent, while inflation is estimated at 4.6 per cent. The central bank also flagged upside risks to inflation arising from volatile commodity prices and possible weather-related disruptions.

The decision reflects the central bank’s balancing act between supporting growth and keeping inflation under control amid an uncertain global environment.