RBI keeps repo rate at 5.25% and retains neutral stance
The Reserve Bank of India just kept the repo rate steady at 5.25%, sticking to its "Neutral" stance.
Basically, they're feeling more confident about the economy than they were in June: core inflation is under control, and the inflation forecast for FY27 (2026-27) has dipped to 5.0%.
RBI signals liquidity tightening in October
RBI isn't seeing big inflation threats right now, even with global tensions and trade risks still around.
They've actually bumped up their growth outlook and think things are pretty balanced for now.
Expect some liquidity tightening moves (like VRRR operations) in October as surplus cash peaks in September.
Looking ahead, markets are continuing to price in a 50 bp hike in this cycle, with escalation in geopolitics or global bond yields as risk factors.
The next policy update lands October 7, right as festival season kicks off and some key foreign flows wrap up.