The Reserve Bank of India (RBI) on Wednesday (October 7, 2026) marginally raised inflation projection to 5.2% for FY27 from earlier forecast of 5%, Governor Sanjay Malhotra said.

RBI Governor Sanjay Malhotra, while speaking at the Monetary Policy Committee (MPC) meeting, said, “Considering all factors, CPI inflation for this year is projected to be 5.2%, with Q2 at 4.9, Q3 at 6 and Q4 at 5.7 per cent, with the risks being evenly balanced. CPI inflation for the first quarter of the next year was projected at 5.6%.”

Follow RBI MPC meeting LIVE updates on October 7, 2026

Consumer inflation accelerated in August to 4.82% from ⁠a year earlier, above the Reserve Bank of India’s 4% medium-term target for ‌a third consecutive month. Higher prices of fuel and food are now biting the economy with nearly half of the consumer basket seeing inflation ‌above 4%. Inflation is expected to peak around 5.9% in the third quarter, with deficient monsoon conditions and crude oil prices around $100 a barrel adding to the risks.

The RBI raised its benchmark repo ‌rate by 25 basis points ​to 5.5% fort he first time in nearly four years.

In his statement, RBI Governor, Sanjay Malhotra said, “After a detailed assessment of the evolving macroeconomic and financial conditions, developments and the outlook, the MPC voted unanimously to increase the policy repo rate by 25 basis points.

Following the repo rate increase, the standing deposit facility (SDF) rate stands at 5.25%, while the marginal standing facility (MSF) rate and Bank Rate are at 5.75%. The MPC stance was changed to a calibrated tightening by a majority.”

India has joined major countries in raising its repo rates as higher oil prices weigh on currencies triggered by the West Asian war. The U.S. Federal Reserve raised its policy rate by 25 basis points in September, while U.S. 10-year Treasury yields have remained elevated at around 5.3%.

(with inputs from agencies)

Transmission of the 50 basis points (bps) rate cut between March and April 2026 , was uneven across sectors, according to Reserve Bank of India’s (RBI) bulletin released on Monday (June 22, 2026).

Transmission of rate cuts to both fresh and outstanding loans has been uneven, the banking regulator observed.

Between May 2022 and Jan 2025, RBI increased repo rate by 250 bps. Between February 2025 and April 2026, the repo rate decreased 85 basis points. A basis point is 1/100th of the percentage. 

The effect on the customers however were not commensurate. Lending and deposit rates hardened. “Transmission to the lending rates fresh and outstanding loans have remained uneven across sectors. During the current easing cycle, the pass-through to lending rates was more pronounced in private sector banks, while public sector banks exhibited relatively stronger transmission to deposit rates,” RBI said in the bulletin. 

In the times when RBI increased rates, weighted average deposit rates increased 259 basis points, more than the repo rate increase of 250 points in the period. During the easing cycle however, WADR on fresh deposits dipped just 85 bps as opposed to the 125 bps between Feb 2025 to April 2026. 

For outstanding deposits, the transmission was even moderated, with 206 bps during rate hikes and 50 bps during rate cuts. 

In terms of loans, weighted average lending rates overall increased 182 bps during rate hikes and dipped 83 bps in easing cycle.

Overall, continued to grow at a rate faster than deposits. Credit grew at a rate of 17.7% and deposits at just 12.2% in May 2026. The wedge has been widening since August 2025.

The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) has decided to keep the repo rate unchanged for the second time in a row, at 5.25%, Governor Sanjay Malhotra announced on Friday (June 5, 2026).

While announcing the decision, Mr. Malhotra highlighted increased market volatility in recent times and said that monetary policy around the world has turned more cautious. 

RBI Monetary Policy Committee updates on June 5, 2026

“We remain confident to withstand these shocks, with minimum pain,” he added noting that the global economic outlook remains clouded. 

Expanding on the decision taken by the MPC, Governor Malhotra said that the Committee took into account the uncertainty surrounding the duration and intensity of the ongoing West Asia conflict, magnitude of its spillover effects, and the pace of restoration of supply chains. Accordingly, the MPC felt it was prudent to wait for greater clarity to emerge, and accordingly chose to continue with a neutral stance. 

Real GDP growth projection reduced; CPI inflation below target

Speaking on inflation, the RBI Governor said that headline CPI inflation was below the 4% target during March (3.4%) and April (3.5%) this year. While food inflation edged up, he said, fuel inflation remain muted as fuel prices remain unchanged in those months. Core inflation remained stable at 3.7%, the Governor added. 

Governor Malhotra announced that the Real GDP growth has been projected at 6.6%, down by 0.3% from earlier projection of 6.9% for FY27. “Prolonged global supply chain disruptions, volatility in global financial markets, and weather-related shocks continue to pose downside risks to the domestic growth outlook,” Mr. Malhotra said.

The Governor also noted that food outlook remains uncertain, and pass through of higher fuel prices are now visible. 

Noting that since the October Policy, the Indian economy has witnessed rapid disinflation, Reserve Bank of India (RBI) Governor Sanjay Malhotra on Friday (December 5, 2025) announced that the Monetary Policy Committee (MPC) has voted unanimously to cut repo rate by 25 basis points to 5.25%.

The MPC also decided to continue with the neutral stance.

“For the first time since the adoption of flexible inflation targeting (FIT), average headline inflation for a quarter at 1.7% in Q2:2025-26, breached the lower tolerance threshold (2%) of the inflation target (4%). It dipped further to a mere 0.3% in October 2025. On the other hand, real GDP growth accelerated to 8.2% in Q2, buoyed by strong spending during the festive season which was further facilitated by the rationalisation of the goods and services tax (GST) rates,” Mr. Malhotra said in his address.

Inflation at a benign 2.2% and growth at 8%, for the first half of this year presents a rare goldilocks period, Mr. Malhotra added. While stating that globally, contrary to earlier expectations, growth has been relatively strong, he said that evolving geopolitical and trade environments, however, continue to weigh on the outlook. “Inflation paths remain divergent with headline inflation remaining above target in most advanced economies, while pressures in most emerging markets are contained, providing room for accommodative monetary policy.”

The Governor noted that conflicting pulls and pressures from AI-fuelled optimism and concerns over high valuations are playing out in global equity markets, while divergence in the monetary policy trajectory of central banks is adding to the uncertainty on capital flows and yield spreads.

Taking various factors into account, real GDP for 2025-26 is projected at 7.3% which is 0.5% more than the earlier projection. CPI inflation for 2025-26 is now projected at 2% which is 0.6% downwards from the earlier projection, the Governor said.

Apart from cutting the repo rate, the RBI in view of the evolving liquidity conditions and the outlook, has decided to conduct OMO purchases of government securities of ₹1,00,000 crore and a 3-year USD/INR Buy Sell swap of $5 billion this month to inject durable liquidity into the system.

Based on the recommendation of the MPC, the RBI reduced the repo rate by 25 bps each in February and April, and 50 basis points in June amidst easing retail inflation.

The retail inflation is trending below 4% since February this year. It eased to historic low in October, aided by an easing of food prices and favourable base effect.

(With PTI inputs)

The Reserve Bank on Wednesday (October 1, 2025) announced a host of measures to help exporters tide over challenges posed by the imposition of 50 per cent tariffs by the U.S. administration on Indian shipments.

The measures include reduced paperwork and compliance burden for small exporters and importers.

RBI MPC meeting updates on October 1, 2025

“The export sector is a vital part of India’s economy,” said RBI Governor Sanjay Malhotra, while announcing steps to further strengthen the sector and enhance ease of doing business for traders.

One of the key measures is the extension of the time period for repatriation from foreign currency accounts of Indian exporters in IFSC, from one month to three months.

In January 2025, the RBI had permitted Indian exporters to open foreign currency accounts with a bank outside India for the realisation of export proceeds.

Funds in these accounts can be used for making import payments or have to be repatriated by the end of next month from the date of receipt of the funds.

“It has now been decided to extend the time period for repatriation, from one month to three months, in case of such foreign currency accounts maintained in IFSC in India,” the RBI said, adding this will encourage Indian exporters to open accounts with IFSC Banking Units and also increase forex liquidity in IFSC.

The amendments to regulations will be notified shortly.

The RBI also increased the period for forex outlay for Merchandise Trade transactions from four months to six months, a move expected to help Indian merchants overcome the challenges they face in completing their business transactions efficiently while maintaining profitability.

“In terms of extant guidelines on MTT, outlay of foreign exchange is allowed up to four months. It has now been decided to increase the period for the forex outlay from four months to six months, in case of MTT,” it said.

Further, with a view to ease compliance for exporters/importers, especially of small-value goods and services, the RBI has decided to simplify the process of reconciliation in the Export Data Processing and Monitoring System (EDPMS) and Import Data Processing and Monitoring System (IDPMS).

As per the revised guidelines, bills can be reconciled and closed by a bank in EDPMS or IDPMS, based on a declaration by the concerned exporter or importer that the amount has been realised in EDPMS/IDPMS of a value equivalent to Rs 10 lakh per bill, or less.

“The revised procedure will also enable a reduction in the realisable value of bills by AD banks based on such a declaration. This measure is expected to reduce compliance burden on small value exporters and importers and enhance ease of doing business,” RBI said.

Governor Malhotra also announced plans to rationalise FEMA regulations regarding non-residents establishing their business presence in India.

Also, key provisions relating to eligible borrowers, recognised lenders, limits on borrowing, cost of borrowing, end-use and reporting, in the External Commercial Borrowing regulations, issued under FEMA, are proposed to be rationalised.

In a bid to promote the use of domestic currency for cross-border settlements, the Reserve Bank on Wednesday (October 1, 2025) announced a slew of measures, including allowing banks to lend in Indian Rupees to non-residents from Bhutan, Nepal and Sri Lanka for bilateral trade.

Observing that India has been making steady progress in the use of the Indian Rupee for international trade, RBI Governor Sanjay Malhotra said permission has been granted to Authorised Dealer banks to lend in Indian Rupees to non-residents from Bhutan, Nepal and Sri Lanka for cross-border trade transactions.

RBI MPC meeting updates on October 1, 2025

Besides, he proposed to establish transparent reference rates for currencies of India’s major trading partners to facilitate INR-based transactions.

RBI has permitted wider use of Special Rupee Vostro Account (SRVA) balances by making them eligible for investment in corporate bonds and commercial papers.

SRVA is an account opened by a foreign bank with an Indian bank to facilitate international trade settlements directly in Indian Rupees (INR). These measures will help reduce dependence on the US dollar and thus shield the economy from sudden exchange rate fluctuations and currency crises.

These steps will help reduce pressure on forex and keep the current account deficit at a comfortable level.

India’s current account deficit moderated to $2.4 billion (0.2% of GDP) in Q1:2025-26 as compared with $8.6 billion (0.9% of GDP) in Q1:2024-25 due to increased net services surplus and strong remittance receipts despite a higher merchandise trade deficit, Malhotra said while announcing the fourth monetary policy review.

“During July-August 2025, the merchandise trade deficit continued to remain elevated. Notwithstanding rising global trade uncertainties, India’s services exports, driven by software and business services, witnessed robust growth in July-August 2025,” he said.

Furthermore, he said, robust services exports coupled with strong remittance receipts are expected to keep the current account deficit (CAD) sustainable during 2025-26.

As on September 26, 2025, India’s foreign exchange reserves stood at $700.2 billion, sufficient to cover more than 11 months of merchandise imports.

Overall, India’s external sector continues to be resilient, and RBI remains confident of meeting external obligations comfortably, he said.

“Notwithstanding the robust domestic macroeconomic fundamentals, the INR has witnessed some depreciation accompanied by phases of volatility. RBI is keeping a close watch on movements of the INR and will take appropriate steps, as warranted,” he said.

The Reserve Bank of India (RBI) on Wednesday (October 1, 2025) Monetary Policy Committee maintaining a neutral kept its policy interest rate unchanged at 5.5% for the second consecutive time, citing concerns over tariff uncertainties.

Announcing the fourth bi-monthly monetary policy of the current fiscal, RBI Governor Sanjay Malhotra said the Monetary Policy Committee (MPC) unanimously decided to keep the short-term lending rate or repo rate unchanged at 5.5% with a neutral stance.

RBI MPC meeting updates on October 1, 2025

The Real GDP Growth for FY26 was projected at 6.8%. This has been revised upwards from earlier projection of 6.5%. Meanwhile, CPI inflation for FY26 has been projected at 2.6%.

While GST rate rationalisation will have a sobering impact on consumption and growth, tariff related developments may slow down the economic expansion in the second half of the current fiscal, the Governor said.

Since February 2025, the RBI has reduced the policy rate by 100 basis points. In its previous policy review in June, it had trimmed the repo rate by 50 basis points to 5.5%.

The central bank has been tasked by the government to ensure that Consumer Price Index (CPI) based retail inflation remains at 4% with a margin of 2% on either side.

Based on the recommendation of the MPC, the RBI reduced the repo rate by 25 bps each in February and April, and 50 basis points in June amidst easing retail inflation.

The retail inflation is trending below 4% since February this year. It eased to a six-year low of 2.07% in August, aided by an easing of food prices and favourable base effect.

With PTI inputs

India private sector activity expanded at the fastest pace on record in August, fuelled by a robust surge in demand led by the dominant services sector, which allowed firms to hike prices at the fastest clip in over 12 years, a survey showed on Thursday (August 21, 2025).

The latest results stand in contrast to expectations for a slowdown in economic growth in Asia’s third-largest economy to average 6.4% this fiscal year after an unexpectedly strong 7.4% expansion during the first three months of 2025.

HSBC’s flash India Composite Purchasing Managers’ Index (PMI), compiled by S&P Global, rose to 65.2 in August from 61.1, confounding expectations in a Reuters poll for a decline to 60.5.

It was the highest reading since the survey began in December 2005 and remained above the 50-mark that separates growth from contraction for the 49th month.

Record expansion was underpinned by the sharpest uptick in total new orders — a key gauge of demand — in nearly 18 years.

The services sector led growth, with its activity index soaring to a survey high of 65.6. The manufacturing sector also showed significant strength — its preliminary PMI rose to 59.8, its highest reading since January 2008.

While that boosted job creation, the survey also showed companies passing on increases in input costs to customers. The output price index increased to an over 12-year high of 55.8 from 53.5 in July.

That also contradicts the recent trend of easing inflation in official data, which dropped to an eight-year low of 1.55% last month.

The Reserve Bank of India, which targets inflation in a 2-6% range, started cutting interest rates early this year to stimulate the economy and paused at the latest meeting but is expected to cut again next quarter.

Firms remained optimistic, with sentiment for the year ahead strengthening to its highest since March.