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Informist, Wednesday, Oct. 7, 2026

 

MUMBAI - Following are the top 10 announcements by Reserve Bank of India Governor Sanjay Malhotra Wednesday in his address at the conclusion of the Monetary Policy Committee's fourth bi-monthly meeting for 2026-27 (Apr-Mar):

 

INTEREST RATES

The Reserve Bank of India's Monetary Policy Committee raised the policy repo rate by 25 basis points to 5.50% in a unanimous decision. The Standing Deposit Facility rate and Marginal Standing Facility rate were accordingly adjusted to 5.25% and 5.75%, respectively.

 

POLICY STANCE

The Reserve Bank of India's Monetary Policy Committee decided to change the stance to 'calibrated tightening' from 'neutral'.

 

GROWTH

The Reserve Bank of India projected GDP growth for FY27 at 7.1% from 6.7?rlier, with the September quarter growth at 7.2% from 6.4?rlier. GDP growth for the December quarter is seen at 6.9% from 6.5?rlier and for March quarter was left unchanged at 6.8%. The central bank projected growth for Apr-Jun FY28 at 7.1%. 

 

INFLATION

The Reserve Bank of India projected its headline inflation for FY27 at 5.2%, against 5.0?rlier. The central bank projected headline inflation for the September quarter at 4.9%, against 4.7?rlier. The headline inflation for the December quarter of the current financial year is seen at 6.0% from 5.9?rlier and for March quarter seen at 5.7% from 5.5?rlier. Core inflation for FY27 is seen at 4.4%, down from 4.3?rlier. The central bank projected its inflation for Apr-Jun FY28 to 5.6% from 5.3?rlier.  

 

 

The near-term outlook on inflation points towards continued pressures from supply side, on account of the deficient Southwest monsoon, El Nino conditions, and high volatility in international oil prices. Price pressures are increasingly becoming visible across a range of commodities within the food component, apart from oil. In addition, early signs of inflation becoming generalised are also evident from the increase in core inflation and higher inflation across a larger segment of the CPI basket.

 

LIQUIDITY

The Reserve Bank of India will use an appropriate mix of liquidity management tools and strive to align the weighted average call rate with the policy repo rate. During August and September, system liquidity increased substantially on account of the recent measures undertaken to attract capital inflows. As measured by the net position under the liquidity adjustment facility, system liquidity stood at an average daily surplus of INR 5.9 trillion since the last MPC meeting in August. The measures taken to absorb liquidity combined with quarterly advance tax outflows moderated the surplus liquidity in September.

 

ADDITIONAL MEASURES

The central bank allowed inter-operability among NBFC account aggregators, enabling aggregation of financial information through all account aggregators from one account aggregator. It has also facilitated SEBI regulated depositories to include information related to deposit accounts in their consolidated account statement. The measures will be implemented by Dec. 31.

 

It will constitute a technical consultative committee for financial markets in response to the rapidly evolving financial market dynamics. The committee will serve as a forum for structured engagement with market participants and other stakeholders on policy and operational matters related to financial markets.

 

EXTERNAL SECTOR

Moderation in global trade growth, elevated energy prices, and persistent trade policy uncertainties pose upside risks to India's current account deficit in 2026-27 (Apr-Mar). Expected buoyancy in services trade surplus, robust inward remittances and implementation of the India-UK trade deal along with other recent bilateral treaties with major trading partners would also provide resilience to India's external sector.

 

India's current account deficit remained modest and well below the sustainable levels in Apr-Jun despite enduring external shocks. India's merchandise trade deficit increased to $58.7 billion during Jul-Aug from $55.1 billion in Jul-Aug 2025, mainly driven by imports of electronic goods and crude oil.

 

TRADE DEFICIT

The balance of payments is expected to record a healthy surplus in 2026-27 (Apr-Mar). Foreign portfolio investment recorded net outflows of $10.3 billion April to Oct. 5, capital flow measures undertaken in the June policy have supported inflows. 

 

FINANCIAL STABILITY

The system-level financial parameters related to capital adequacy, liquidity, asset quality, and profitability of scheduled commercial banks remain robust. Similarly, the system-level parameters of NBFCs are also sound.

 

EXCHANGE RATE

The central bank remains committed to ensuring orderly adjustments to the exchange rate that are in sync with the underlying macroeconomic fundamentals and curbing excessive volatility. India's foreign exchange reserves continue to remain adequate in terms of the standard metrics of reserve adequacy with import cover of around 11 months and external debt cover of 94.4%. We remain committed to ensuring orderly adjustments to the exchange rate that are in sync with the underlying macroeconomic fundamentals and curbing excessive volatility.

End

 

Compiled by J. Navya Sruthi

Filed by Akul Nishant Akhoury

 

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