Overview
- The Monetary Policy Committee kept the repo rate at 5.25% with a neutral stance by a 5–1 vote, and most members called the current setting appropriate.
- RBI raised its FY26 growth estimate to 7.4% and lifted H1 FY27 projections to about 6.9–7.0%, citing resilient domestic demand and investment.
- Inflation readings under the rebased CPI remain low, with January at 2.75% and FY26 projected near 2.1%, and a drift toward 4% in early FY27 seen mainly from base effects and precious-metal prices.
- Policymakers highlighted a data-dependent pause as they await revised GDP, CPI and IIP series and fuller pass-through of the cumulative 125 bps of cuts delivered over the past year.
- RBI bulletins said India–EU and interim India–US trade deals lifted investor sentiment, aiding FPI inflows and the rupee, even as January’s merchandise trade deficit widened on surging gold and silver imports and mixed exports, including gains to China and declines to the US.