In the bond market, the pause combined with a cautious undertone suggests that yields are likely to remain range-bound in the near term, albeit with a discernible upward bias as inflation risks build.
The MPC's approach is data-dependent and cautiously hawkish: it acknowledges weaker growth, flags higher inflationary risks, and keeps policy unchanged for now to watch how the trade-off evolves.
Sarvjit Singh Samra of Capital Small Finance Bank said that RBI MPC has appropriately refrained from deploying interest rates as a tool to counter the recent weakness in the rupee.
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