The RBI’s six-member rate setting panel has unanimously decided to keep the repo rate unchanged at 5.25 per cent in its first meeting of FY27. The decision comes in the wake of risks to inflation and growth from rising crude oil prices and supply chain disruptions due to the West Asia war.
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The monetary policy committee also decided to continue with its “neutral” monetary policy stance.
While the economy is on a stronger footing, Governor Malhotra cautioned about upside risks to inflation outlook due to higher global energy prices, supply chain disruptions and the Super El Nino weather phenomenon.
He said high input and insurance costs can constrain growth. The MPC opined that intensitying conflict and damage to energy infrastructure in West Asia are risks to growth and therefore it felt that it is prudent to wait and watch. Malhotra observed that muted global growth will impact external demand and remittances.
“The MPC noted that the intensity and the duration of the conflict in West Asia and the resultant damage to the energy and other infrastructure add risk to the inflation and growth outlooks. However, the fundamentals of the Indian economy are on a stronger footing, providing it with greater resilience to withstand shocks now than in the past,” Malhotra said.
“The economy is confronted with a supply shock. It is prudent to wait and watch the changing circumstances and the evolving growth-inflation outlook,” he added
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Published on April 8, 2026