Overview
- The Monetary Policy Committee voted unanimously to keep the repo rate at 5.25% and retain a neutral stance, a decision announced on Friday that the RBI framed as a cautious pause while risks play out.
- The RBI raised its FY27 consumer inflation forecast to 5.1% from 4.6% and trimmed real GDP growth to 6.6% from 6.9%, citing higher global oil prices, supply disruptions from the West Asia conflict, and weak monsoon risks.
- To attract foreign capital the government exempted eligible foreign investors from capital gains and interest taxes on government securities and the RBI expanded the Fully Accessible Route to include new 15-, 30- and 40‑year G‑secs and removed several FPI limits.
- The central bank offered concessional forex swaps for public sector firms through Sept. 30, said it would bear hedging costs for certain three‑ to five‑year FCNR(B) deposits, and raised NRI/PROI investment limits to boost dollar inflows.
- Markets reacted with modest stabilization as the rupee strengthened and 10‑year yields eased, the RBI pointed to foreign exchange reserves of about $682.3 billion as a buffer, and officials warned further rate hikes remain on the table if inflation becomes broad‑based.