Reserve Bank of India expected to hold policy rate steady

A majority of economists expect the Reserve Bank of India to keep its policy rate unchanged at the June meeting. Geopolitical tensions and adverse weather forecasts are cited as key factors behind the anticipated decision.

Economists polled by The Economic Times predict the central bank will maintain its current stance amid risks to growth and potential inflationary pressures. Geopolitical issues and forecasts of adverse weather conditions are seen as threats that could affect the economy and push up prices for fuel and other goods.

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RBI headquarters with repo rate display amid West Asia conflict indicators, for monetary policy news illustration.
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RBI holds repo rate at 5.25% amid West Asia conflict

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The Reserve Bank of India's Monetary Policy Committee on Wednesday kept the key policy rate, the repo rate, unchanged at 5.25 per cent. Amid uncertainties from the West Asia conflict, the committee retained its neutral stance. It has lowered the GDP growth forecast to 6.9 per cent for FY27.

The Reserve Bank of India has maintained its policy rate at 5.25 percent with a neutral stance while introducing steps to attract foreign capital.

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The Indian rupee sank to a fresh record low against the US dollar, fueled by soaring energy import costs during an ongoing energy crisis and accelerating capital outflows. This has intensified pressure on the Reserve Bank of India (RBI) to potentially hike interest rates, ending a pause in monetary tightening.

 

 

 

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