3 weeks ago
RBI MPC holds repo rate, flags inflation and geopolitical risks
This story is about a meeting of India's central bank, the Reserve Bank of India.
The bank decides the interest rate, which is the cost of borrowing money.
At this meeting, the bank decided to keep the main interest rate the same.
That means it did not go up or down.
The bank is being careful because the prices of some things are going up.
Prices going up is called inflation, and the bank tries to keep it from getting too high.
One big reason prices are rising is that oil has become more expensive because of a conflict in West Asia.
The article says India's economy is still growing, but a little more slowly than last year.
It also says the bank might raise the interest rate later this year if prices keep rising or the weather turns bad.
Raising interest rates is a way the bank can help slow down inflation.
The Reserve Bank of India's Monetary Policy Committee kept the repo rate and policy stance unchanged at its latest review.
Growth was projected 10 basis points higher and inflation 10 basis points lower compared with the June forecast.
Headline consumer inflation rose above 4% in June, driven by higher crude oil and commodity prices after renewed conflict in West Asia.
India's GDP growth is expected to moderate to 6.6% this fiscal from 7.7% last fiscal, with crude assumed at $82-87 per barrel.
A 25-basis-point repo rate hike later this fiscal cannot be ruled out if geopolitical and weather risks materialise, the author says.
- Who
- The Reserve Bank of India's Monetary Policy Committee (MPC), with analysis by Crisil's chief economist.
- What
- Held the repo rate and policy stance steady while revising the growth forecast slightly up and the inflation forecast slightly down.
- Where
- India
- When
- The latest MPC review, citing data through June and capital inflows by end-July.
- Why
- To manage a delicate growth-inflation balance amid higher crude prices from the West Asia conflict, weather risks and a weaker rupee.
Key facts
- Decision
- Repo rate and policy stance retained (unchanged)
- June headline consumer inflation
- Above 4%, crossing the midpoint of the RBI's tolerance band
- June core inflation
- 3.9%; 2.5% excluding precious metals
- Forecast revisions vs June
- Growth +10 basis points; inflation -10 basis points
- Crude oil assumption
- $82-87 per barrel this fiscal vs $70 last fiscal
- India GDP growth forecast
- 6.6% this fiscal vs 7.7% last fiscal
- Global GDP growth (IMF)
- 3.0% in 2026 vs 3.5% in 2025
- Foreign capital inflows (RBI schemes)
- Over $40 billion by end-July









