Mumbai
TheReserve Bank of India (RBI) on Wednesday kept the repo rate unchanged at 5.25%, maintaining a neutral stance as it assesses the fallout of the West Asia conflict on inflation and growth.
RBI Governor Sanjay Malhotra said the Monetary Policy Committee (MPC) has adopted a cautious “wait-and-watch” approach amid rising global uncertainties. The six-member panel voted unanimously to hold rates.
While India’s macroeconomic fundamentals remain strong, Malhotra warned of “increased upside risks” to inflation from elevated crude oil prices, weather disruptions and geopolitical tensions. He noted that any disruption in energy supplies, especially through the Strait of Hormuz, could impact both inflation and growth.
High-frequency indicators point to sustained economic momentum, driven by robust consumption and steady investment. However, global headwinds may weaken external demand and remittances.
Other policy rates remain unchanged, with the Standing Deposit Facility at 5% and the Marginal Standing Facility and bank rate at 5.5%. The RBI also cautioned that rising oil prices could widen the current account deficit, though government measures may help stabilise supply chains. The central bank estimates inflation at 4.6% for 2026-27, within the 2–6% target band. On policy transmission, Malhotra said banks have passed on about 90 basis points of rate cuts on loans, adding recent forex measures were temporary steps to curb rupee volatility.
Trims growth view to 6.9% as risks rise|Inflation at 4.6%, but risks ticking up
Mumbai
TheReserve Bank of India (RBI) on Wednesday projected India’s GDP growth at 6.9 per cent for FY27, lower than the estimated 7.6 per cent for FY26, citing elevated commodity prices and supply chain disruptions stemming from the West Asia crisis.
Unveiling the first bi-monthly monetary policy, RBI Governor Sanjay Malhotra said merchandise exports could be hit by disruptions in key shipping routes and rising freight and insurance costs. However, domestic demand is expected to remain supported by strong services sector momentum, GST rationalisation, rising manufacturing capacity utilisation, and healthy corporate and banking sector balance sheets.
“India’s macroeconomic fundamentals exuded confidence with buoyant growth and low inflation, though conditions turned adverse in March due to intensifying geopolitical tensions,” he said. The RBI noted that higher input costs due to energy prices, along with supply chain constraints, could weigh on growth. Still, government measures to support exports and stabilise supply chains may cushion the impact. The Monetary Policy Committee (MPC) flagged downside risks to growth amid uncertainty over the intensity and duration of the West Asia conflict. For FY27, quarterly GDP growth is projected at 6.8 per cent (Q1), 6.7 per cent (Q2), 7 per cent (Q3), and 7.2 per cent (Q4).
On inflation, the RBI projected retail inflation at 4.6 per cent for FY27, within the target band of 4 per cent (+/- 2 per cent). Quarterly projections stand at 4 per cent (Q1), 4.4 per cent (Q2), 5.2 per cent (Q3), and 4.7 per cent (Q4). The MPC observed that inflation remains below target but warned of upside risks from rising energy prices and potential weather-related food price shocks. Core inflation remains muted, though supply disruptions could create uncertainty.
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Mumbai
TheReserve Bank of India found no governance or conduct-related issues at HDFC Bank during its supervisory inspection, Governor Sanjay Malhotra said Wednesday.
On resignation of HDFC Bank Chairman Atanu Chakraborty, Malhotra said “HDFC Bank is a Domestic Systemically Important Bank (D-SIB) with sound financials, a professional board, and competent management. Periodic assessments show no material concerns.”