Economic Buzz: RBI keeps repo rate unchanged but warns of elevated upside risks to inflation outlook

The Reserve Bank of India?s (RBI?s) Monetary Policy Committee (MPC) decided to keep policy repo rate unchanged at 5.25% while announcing its first policy decision of FY27 on Wednesday, April 8. The six-member panel, chaired by Governor Sanjay Malhotra, met over the past few days to review key issues. This review comes amid rising geopolitical tensions in the West Asia and a weakening rupee. In its last meeting in February 2026, the MPC had kept the repo rate steady at 5.25% after a cumulative 125-basis-point cut in 2025, adopting a cautious ?wait-and-watch? approach focused on stability.

RBI noted in its MPC that geopolitical uncertainties have heightened significantly. Headline inflation remains contained and below the target, but upside risks to the inflation outlook have increased, driven by increased energy price pressures and probable weather disturbances affecting food prices. Core inflation pressures remain muted, although supply chain dislocations and the risk of second round effects render the future inflation trajectory uncertain.

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