Remittances to India are projected to reach a record high of $137–140 billion in FY26 before easing to $135–137 billion in FY27, as per a recent report. The report also suggests that enhancing the dematerialization of Retail Direct holdings could increase interoperability and draw significant interest from retail investors towards debt markets. Analyzing the central bank governor’s language in the monetary policy meeting, the report notes that the latest statement was the most cautious or hawkish among the last eight statements but did not indicate an immediate rate hike.
“The choice of words and the underlying message in the recent statement demonstrate a profound understanding of the evolving global economic scenario without signaling an imminent rate hike, as the regulatory focus oscillates between growth and inflationary worries,” the report stated. The governor emphasized that the recent sharp depreciation of the INR does not align with India’s macro fundamentals and stressed the need for corrective measures as the currency moves back towards its intrinsic value.
Regarding liquidity, SBI Research highlighted that the Reserve Bank of India has infused Rs. 4.6 lakh crore since the February monetary policy meeting, including OMO purchases of Rs. 1 lakh crore and variable rate repo operations of Rs. 3.6 lakh crore across different durations. The RBI’s projections for FY27 include average inflation at 4.6 percent, core inflation at 4.4 percent, and real GDP growth at 6.9 percent, with anticipated improvements in the latter part of the current fiscal year. Additionally, the central bank pointed out that fluctuations in crude oil and other commodity prices, coupled with potential El Niño conditions, could introduce significant volatility to inflation.
Despite this, the central bank expressed optimism about near-term food supply prospects, buoyed by a robust rabi crop, offering some relief amidst uncertainties.
