Archive · 12 Sep 2026
RBI to Reassess Inflation, Growth Amid Crude Oil Rise
The RBI is India’s central bank, and it will study the economy again in October.
It will look at whether growth is slowing and whether prices are rising too quickly.
Oil became more expensive in August than in July.
More expensive oil can make many things cost more, but the effect depends on how much of the increase reaches consumers.
The government has absorbed some of the higher oil cost, which softened the impact.
The RBI is also watching food prices, inflation expectations and global interest rates.
Foreign-currency deposits brought in USD 127.22 billion through an RBI programme.
The RBI says these funds supported foreign-exchange markets and that it has tools to handle extra money in banks.
RBI Governor Sanjay Malhotra said the MPC will reassess growth and inflation dynamics at its October 5-7, 2026 meeting.
The Indian crude oil basket rose from an average of USD 82 in July to USD 90 in August, with the inflation impact depending on pass-through.
Malhotra said inflation risks are present on both sides and cited food prices, underlying inflation, expectations and price persistence as factors to monitor.
Global bond yields, including the US 10-year yield approaching 5 per cent, could affect India’s growth, inflation and interest rates.
FCNR(B) deposits raised through the RBI’s forex swap facility totalled USD 127.22 billion, while the RBI said it can manage surplus banking liquidity.
- Who
- RBI Governor Sanjay Malhotra and the Monetary Policy Committee.
- What
- The RBI will reassess India’s growth and inflation outlook while monitoring crude oil prices, global bond yields, foreign-currency inflows and banking liquidity.
- When
- Malhotra spoke on Friday, September 11; the MPC meeting is scheduled for October 5-7, 2026.
- Where
- India; Malhotra made the remarks in an interview with CNBC-TV18.
- Why
- Rising crude oil prices and global bond yields could affect inflation, growth and interest rates, while strong FCNR(B) inflows and surplus liquidity require monitoring.
- Next MPC meeting
- October 5-7, 2026.
- Indian crude oil basket
- The average rose from USD 82 in July to USD 90 in August, according to Malhotra.
- Inflation risks
- Malhotra said risks are present on both sides and declined to give his own pre-meeting assessment.
- Global bond yields
- The US 10-year yield was approaching 5 per cent, while G7 yields were at multi-decade highs.
- FCNR(B) inflows
- Deposits mobilised through the recently concluded RBI forex swap facility totalled USD 127.22 billion.
- Deposit maturities
- Approximately 48.5-50 per cent had five-year tenors, about 42 per cent were in the three-to-four-year bracket, and about 9 per cent were in the four-to-five-year window.
- Liquidity management
- The RBI said it has sufficient tools to manage surplus liquidity in the banking system.
