Financial News: India Holds Key Interest Rates

India Holds Key Interest Rates

08/05/2026 - 01:51:00 (RTTNews)

(RTTNews) - The Reserve Bank of India maintained its key interest rates and the neutral stance on Wednesday.

The Monetary Policy Committee unanimously decided to hold the policy repo rate at 5.25 percent. The MPC also decided to continue with the neutral stance.

The RBI had reduced the repo rate by a cumulative 125 basis points in the latest easing cycle that began in February 2025.

RBI Governor Sanjay Malhotra said headline inflation edged up above the target, as expected. Inflation is expected to rise further in the near-term and peak in the third quarter of 2026-27, primarily due to food and fuel prices, before moderating thereafter.

CPI inflation for 2026-27 is projected to be 5.0 percent, slightly down from the previous forecast of 5.1 percent.

Core inflation is estimated at 4.3 percent for 2026-27 compared to the earlier estimate of 4.7 percent.

Malhotra said growth continued to be supported by resilient domestic demand, sustained expansion in manufacturing and services activity, and robust exports, reaffirming India's position as the world's fastest-growing major economy.

The bank raised its real GDP growth outlook for 2026-27 to 6.7 percent from 6.6 percent.

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