RBI keeps key rate at 5.25%, lowers FY27 GDP forecast
The RBI just decided to keep its key interest rate steady at 5.25% after a unanimous vote, saying global uncertainty (like higher energy prices and ongoing geopolitical tensions) makes it risky to shake things up right now.
At the same time, it has lowered its GDP growth forecast for FY27 from 6.9% to 6.6%, pointing to market ups and downs and supply chain hiccups as reasons.
RBI raises inflation forecast to 5.1%
Inflation is expected to be a bit higher than before, with the new forecast at 5.1% instead of 4.6%.
The RBI says it is taking a careful, data-driven approach in this unpredictable environment: "Accordingly, the MPC voted to keep the policy repo rate unchanged. At the same time, the MPC will continue to remain data dependent and closely monitor the developments, including supply side pressures getting embedded in the general price level and inflation expectations..."
Basically, it is keeping a close eye on prices and playing it safe for now.