Financial News: India Holds Key Interest Rates; Upgrades Inflation Forecas

India Holds Key Interest Rates; Upgrades Inflation Forecast

06/05/2026 - 02:37:00 (RTTNews)

(RTTNews) - The Reserve Bank of India left its key policy rates unchanged on Friday, and upgraded its inflation outlook citing higher oil prices and monsoon uncertainty. The Monetary Policy Committee, governed by Sanjay Malhotra, unanimously decided to hold the policy repo rate at 5.25 percent. The committee 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. The standing deposit facility rate was retained at 5.00 percent and the marginal standing facility rate and the Bank Rate were maintained at 5.50 percent.

Despite the global shock, CPI inflation remained below the target, the bank observed. Although the baseline projections point towards headline inflation firming up towards the upper tolerance band in the current fiscal, the impact of the supply shock is expected to wane from March quarter, the MPC said.

Prices of several inputs increased due to the partial pass-through of high global crude oil prices. This could exert upward pressure on inflation in the coming months as firms pass on higher input costs.

Inflation outlook for the current year was revised up to 5.1 percent from 4.6 percent and core inflation projection was raised to 4.7 percent from 4.4 percent.

Inflation forecasts are subject to upside risks due to global supply chain disruptions, global commodity price shocks, uncertainty over south-west monsoon and El Niño conditions, said RBI.

Real GDP growth for 2026-27 was projected at 6.6 percent, which was lowered from the previous forecast of 6.9 percent.

The governor cited prolonged global supply chain disruptions, volatility in global financial markets, and weather-related shocks as downside risks to the domestic growth outlook.

For comments and feedback: contact editorial@rttnews.com

Market News provided by RTTNews

RECENT INTERNATIONAL FINANCIAL NEWS

Eurozone Private Sector Expands For First Time In 4 Months (04 min(s), 52 sec(s) ago)
(RTTNews) - Eurozone private sector expanded for the first time in four months in July on renewed ...Full Story»

German Private Sector Returns To Expansion Territory (01 hr(s), 03 min(s), 52 sec(s) ago)
(RTTNews) - Germany's private sector returned to expansion territory in July for the first tim ...Full Story»

French Private Sector Contracts Marginally (02 hr(s), 07 min(s), 52 sec(s) ago)
(RTTNews) - France's private sector contracted only marginally in July as the services economy ...Full Story»

Energy Prices Ease Spain's Producer Inflation In June (02 hr(s), 41 min(s), 52 sec(s) ago)
(RTTNews) - Spain's producer price inflation moderated in June after hitting the highest since ...Full Story»

German Consumer Sentiment To Fall In August (02 hr(s), 48 min(s), 52 sec(s) ago)
(RTTNews) - German consumer confidence is set to weaken in August due to lower income expectations ...Full Story»

Czech Economic Sentiment Edges Higher In July (03 hr(s), 06 min(s), 52 sec(s) ago)
(RTTNews) - The Czech economy's confidence remained slightly more positive in July, while cons ...Full Story»

Hungary Jobless Rate Rises To 4.5% (04 hr(s), 06 min(s), 52 sec(s) ago)
(RTTNews) - Hungary's unemployment rate increased in the April to June period, data from the H ...Full Story»

UK Retail Sales Rise Unexpectedly (04 hr(s), 27 min(s), 52 sec(s) ago)
(RTTNews) - UK retail sales grew unexpectedly in June as warm weather boosted outdoor product sale ...Full Story»