Blitz India Business
NEW DELHI: The Reserve Bank held the repo rate at 5.25 per cent, raised its FY27 growth forecast to 6.7 per cent from 6.6, and cut its inflation projection to 5.0 per cent. All six Monetary Policy Committee members voted to hold, and the neutral stance was retained.
The combination is the point. Growth revised up and inflation revised down in the same statement is the rarest pairing in macroeconomics, and it is what allowed the Committee to sit still. Core inflation was projected at 4.3 per cent. Governor Sanjay Malhotra indicated the central bank wanted a clearer inflation signal before moving policy in either direction.
The Reserve Bank of India, Mumbai. Photo: to be sourced copyright-clean from RBI or Wikimedia Commons, with the licence stated.
A hold is not inaction when the forecasts move in opposite directions beneath it. It is the Committee saying the mix is doing the work.
At a Glance
• Repo rate 5.25 per cent — unchanged
• Vote 6–0 to hold
• Stance Neutral, retained
• FY27 growth forecast 6.7 per cent, raised from 6.6
• Inflation projection 5.0 per cent; core at 4.3 per cent
The Committee is balancing genuinely opposed forces: fresh geopolitical tension in West Asia and oil price volatility on one side; resilient domestic demand, steady corporate performance and healthy capital inflows on the other. An erratic southwest monsoon sits in between, capable of pushing food inflation either way depending on August and September rainfall.
For treasury desks the operative signal is the stance, not the rate. Neutral, held with a unanimous vote, and a growth forecast revised upward, points to a central bank comfortable waiting rather than one preparing to move. The next data that could change that arithmetic is the monsoon’s final departure figure and the food component of the coming CPI prints.