Reserve Bank of India (RBI) has projected GDP growth to 6.7 percent in this fiscal year, deciding to keep the Repo rate unchanged at 5.25 percent with neutral stance. RBI Governor Sanjay Malhotra has said that country’s economic growth continues to be supported by resilient demand and it remains world’s fastest growing large economy. He said, country’s economy has performed better than expected in April-June quarter of this fiscal year.
Announcing the Monetary Policy Committee’s decision today, Mr. Malhotra said, RBI has decided to keep repo rate unchanged at 5.25 percent and retained a neutral stance. Repo rate is the interest rate at which the central bank lends short-term money to commercial banks against government securities.
He said, RBI has lowered CPI inflation projection to 5 percent from earlier estimate of 5.1 percent for financial year 2027. The Governor said the recent rise in inflation was largely driven by food and fuel prices rather than broad-based demand pressures.
Mr. Malhotra said, economy had performed better than expected during the first quarter of the financial year, prompting the central bank to revise its real GDP growth projection for 2026-27 to 6.7 per cent. The RBI Governor said, West Asia conflict continues to challenge global economy by disrupting key trade routes.
RBI struck an optimistic note on the domestic economy, raising its growth projection for 2026-27 while lowering its inflation forecast, saying robust exports, steady investment activity and easing supply-side disruptions have strengthened the macroeconomic outlook despite persistent global uncertainties.
On the external front, the RBI said foreign direct investment inflows remained robust while foreign portfolio investment has witnessed a turnaround in recent months. The Governor said, country’s foreign exchange reserves remain comfortable at nearly 693 billion US dollars, providing import cover of more than ten months.
RBI Governor Sanjay Malhotra has said that Polymer notes are expected to be in circulation at the beginning of next financial year, if everything goes as per schedule. Addressing a press conference in Mumbai, Mr. Malhotra said, Polymer notes enhances durability. He said that details about the security features and other will be communicated soon. While talking about Central Bank Digital Currency (CBDC) and Unified Lending Interface, Deputy Governor Rohit Jain said that its uses is increasing and various stakeholders are accepting it.
