The Reserve Bank of India’s Monetary Policy Committee (MPC) decided to maintain the policy repo rate at 5.25%, aligning with economist expectations. The Standing Deposit Facility (SDF) rate was set at 5%, with the Marginal Standing Facility (MSF) rate and bank rate at 5.5%.
During the second bi-monthly monetary policy meeting for FY27, held from June 3 to June 5, RBI Governor Sanjay Malhotra announced the unanimous decision of the MPC. The committee opted to keep the policy repo rate unchanged at 5.25% under the Liquidity Adjustment Facility (LAF) after a thorough evaluation of macroeconomic and financial conditions.
Governor Malhotra highlighted the resilience of the economy while acknowledging incipient stress in certain sectors and significant risks related to inflation and growth assessments. The RBI revised its real GDP growth forecast for FY27 to 6.6%, down from the previous estimate of 6.9%, citing global uncertainties, geopolitical tensions, supply chain disruptions, and rising energy prices.
The governor expressed confidence in the resilience of services exports amidst global uncertainties and mentioned government measures to support the economy against external shocks. External factors, including geopolitical tensions and global uncertainty, continue to pose risks to growth prospects, while fuel inflation remained subdued in March and April, with stable core inflation at 3.7% during the same period.
