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

Spain Producer Price Inflation Strongest Since 2022 (49 min(s), 39 sec(s) ago)
(RTTNews) - Spain producer price inflation increased at the fastest pace since late 2022 in May on ...Full Story»

Spain GDP Growth Slows In Q1 (01 hr(s), 08 min(s), 39 sec(s) ago)
(RTTNews) - Spain's economic growth softened, as estimated, in the first quarter, final data f ...Full Story»

Hong Kong Trade Gap Widens In May (01 hr(s), 23 min(s), 39 sec(s) ago)
(RTTNews) - Hong Kong's foreign trade deficit increased notably in May from a year ago as impo ...Full Story»

French Consumer Confidence Rises In June (02 hr(s), 10 min(s), 39 sec(s) ago)
(RTTNews) - French consumer confidence improved in June after falling to a more than three-year lo ...Full Story»

German Consumer Confidence To Improve In July: GfK (02 hr(s), 14 min(s), 39 sec(s) ago)
(RTTNews) - German consumer sentiment is set to improve in July driven by the moderate rise in inc ...Full Story»

Hungary Unemployment Rate Falls To 4.3% (03 hr(s), 31 min(s), 39 sec(s) ago)
(RTTNews) - Hungary's unemployment rate decreased in the March to May period, data from the Hu ...Full Story»

Australia Unemployment Rate Falls (03 hr(s), 55 min(s), 39 sec(s) ago)
(RTTNews) - Australia's unemployment rate dropped marginally in May, data published by the Aus ...Full Story»

Japan Leading Index Rises More Than Estimated (04 hr(s), 13 min(s), 39 sec(s) ago)
(RTTNews) - Japan's leading index improved more than estimated in April to the highest level i ...Full Story»