With the rupee nearing the psychologically important 100-per-dollar mark, RBI Guv Malhotra and PM Modi may need to raise interest rates and offer targeted tax incentives to stem capital outflows
While a majority of economists expect the central bank to keep rates unchanged, some market indicators like overnight indexed swaps are already pricing in a rate hike
The Reserve Bank of India's monetary policy committee will decide on the repo rate and announce inflation projections as well on June 5
Today's Opinion highlights the RBI's policy choices, soaring IPL franchise valuations, fiscal challenges, climate targets and a timely examination of contemporary China
With oil prices elevated and monsoon risks looming, the RBI is expected to hold rates steady while reassessing inflation and growth forecasts
India's policy calendar this week is packed with the RBI's June review, FY26 GDP data, India-US trade talks, GST numbers, PMI readings and fuel export levy changes
Inflation will rise in the second half of the year. Growth, too, will falter. It's time to explore other options
Nearly 80 per cent of economists, 44 of 56, in the May 22-29 Reuters poll expected the Monetary Policy Committee to keep the repo rate unchanged at 5.25 per cent on June 5
The domestic rate-setting panel cut the policy repo rate by a cumulative 125 basis points in 2025 and it was on hold in the February and April policies
RBI Governor Sanjay Malhotra said the central bank is monitoring whether supply shocks from the West Asia conflict trigger broader inflationary pressures
The ongoing West Asia conflict has highlighted India's structural vulnerability to energy shocks, reinforcing the need to reduce dependence on imported crude and accelerate efforts to strengthen energy security, according to an external member of the RBI's rate-setting panel. Nagesh Kumar, who is the director of the Institute for Studies in Industrial Development and also a part of the Monetary Policy Committee, said the Indian approach needs to focus both on stepping up oil exploration domestically and hastening the transition to alternative sources. "The high dependence on imported crude makes the Indian economy highly vulnerable to volatility in the hydrocarbons market. While India's macroeconomic fundamentals remain resilient, and the Indian economy will continue to remain the fastest growing major economy with a growth rate of nearly 7 per cent in 2026-27, it is time to prioritise energy security and resilience for sustaining the accelerating economic growth trajectory," Kumar .
Members of the Reserve Bank's rate-setting panel voted for the status quo on interest rates earlier this month, citing uncertainties posed by the West Asia crisis and its impact on inflation, according to minutes of the Monetary Policy Committee (MPC) released on Wednesday. RBI Governor Sanjay Malhotra opined that the West Asia conflict poses challenges to the Indian economy through a number of channels exports, supply of critical commodities, elevated energy and other commodity prices, remittances, uncertainty, and subdued global demand. Overall, geopolitical uncertainties have intensified with the conflict widening its spread over the last month, he said. As a result, supply chain disruptions, which may take longer to subside fully and restore the logistics network, pose downside risks to the growth and upside risks to inflation. "As for monetary policy, this represents a supply shock. The underlying inflation pressures, minus the shock, are contained. "If the conflict remains .
Banks could see Rs 35,000 - Rs 40,000 crore freed up of IFR corpus through reversal
The Reserve Bank of India on Wednesday said "excessive speculation" on the rupee prompted surprise actions on the currency front in the last fortnight, but clarified that its measures will not remain forever. "In the last few weeks of March, we have witnessed heightened volatility in the foreign exchange market. These measures are reactions to the specific market movements. They are not signalling any structural changes. These are not measures going to remain forever," Malhotra said in a post-policy press conference. Deputy Governor T Rabi Sankar said there was an "artificial drying up" of supply in the market during those days, which led to the measures. The comments from the apex bank came for the first time after it capped NOP (net open positions)-rupee positions in the onshore deliverable market at USD 100 million and barred authorised dealers from offering non-deliverable forwards. The first measure helped the local currency to appreciate sharply, but gains were reversed withi
The central bank raised its inflation forecast to 4.6 per cent and flagged risks from West Asia tensions, while projecting GDP growth at 6.9 per cent for the current financial year
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West Asia conflict shifts RBI tone to caution; Rajkumar Singhal suggests investment strategy as RBI cuts growth outlook, raises inflation forecast