The Reserve Bank of India keeps its repo rate steady as Governor Sanjay Malhotra emphasises patience and monitors global and domestic factors influencing inflation, signalling a cautious approach amid ongoing uncertainties.
The Reserve Bank of India kept its benchmark repo rate unchanged earlier this month as Governor Sanjay Malhotra argued for patience on inflation, saying policymakers need more evidence before deciding whether to change course.
According to minutes of the Monetary Policy Committee meeting released on Wednesday, Malhotra backed holding rates steady for a fourth straight decision while the central bank watched for signs that higher energy costs linked to the US-Iran conflict could spill into broader price pressures. He said the Indian economy had held up better than expected in the first quarter of 2026-27 despite supply-chain disruption, West Asia tensions and an uneven monsoon.
Malhotra said monetary action against a supply shock becomes necessary only when it begins to feed general inflation, unsettle expectations or become persistent. For now, he said, the evidence remained limited, though he warned that further signs of food, fuel or other input costs driving a wider rise in prices could force the RBI to tighten policy.
Deputy Governor Poonam Gupta struck a similar note, saying the best approach was to wait and watch for a little longer so weather-related risks could settle and the extent of any supply-driven inflation could become clearer. Her view reflected the RBI’s broader cautious stance after the June policy meeting, when the committee kept the repo rate at 5.25 per cent and adjusted its growth and inflation outlooks amid uncertainty over the monsoon and global risks.
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