The classical conundrum faced by RBI as it navigates through a complex set of variables appears to be of managing the currency, economic growth, and inflation, said Killol Pandya
The important question is whether or not there will there be an about turn in the flow of funds in the debt segment? This is something which will be tested in the coming months.
Reserve Bank Governor Sanjay Malhotra on Friday said the forex reserve stood at a healthy USD 682.3 billion, adequate to provide import cover for about 11 months. Various policy initiatives are expected to strengthen the balance of payments, he said while announcing the second bi-monthly monetary policy for the current fiscal. The initiatives include the recent agreements with major trading partners, allowing 100 per cent FDI in the insurance sector, ethanol blending programme, push for energy transition, easing FDI restrictions for land-bordering countries, liberalisation of the ECB framework, and several others, he said. "As of May 29, 2026, India's foreign exchange reserves stood at a healthy USD 682.3 billion, adequate in terms of the standard metrics of reserve adequacy, including import cover (for about 11 months) and external debt (89.1 per cent)," he said. "While our foreign exchange reserves provide a strong buffer against external shocks, we have a broad range of regulato
Keeping rates on hold, the RBI flagged concerns over fuel-led inflation, supply-chain disruptions and a weak monsoon while projecting GDP growth of 6.6 per cent for FY27
RBI MPC June: The policy committee kept the repo rate unchanged at 5.25 per cent, and the committee maintained its 'neutral' stance
RBI MPC June meeting: In its policy meeting, which took place between June 3-5, the committee continued with the 'neutral' stance
The Reserve Bank of India held the repo rate at 5.25 per cent for a third straight review, raising its inflation forecast while warning of risks from the prolonged West Asia conflict
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 .