RBI Holds Rate at 5.25%, Raises Inflation to 5.1%
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- Reserve Bank of India kept its policy repo rate unchanged at 5.25% despite surging global energy costs and a weakening rupee.
- Reserve Bank of India raised its FY2027 inflation projection by 50 basis points to 5.1% while cutting its growth outlook for the year to 6.6% from 6.9%.
- Governor Sanjay Malhotra warned that the geopolitical impasse in the Middle East and sharply rising energy prices are clouding the global economic outlook.
- India's rupee has slipped more than 6% year‑to‑date against the dollar, trading at 95.78 per USD, prompting the government to sell dollars via state banks and raise gold duties.
- India's consumer inflation rose to 3.48% in April, its sixth consecutive month, with food price inflation accelerating to 4.2% from 3.87% in March.
Why it matters: Higher food inflation and a rupee that has slipped over 6% push import costs up, tightening household budgets and eroding real wages for many families.
