India holds rates at 5.25%, lifts inflation view and trims GDP outlook
What's new: The Reserve Bank of India now sees inflation at 5.1% in FY2027 and growth at 6.6%, as oil and rupee pressure build.
India's central bank left its policy rate unchanged at 5.25% on Friday, but raised its inflation forecast and cut its growth outlook as higher energy costs and Middle East tensions weigh on the economy. The Reserve Bank of India now projects inflation of 5.1% for the financial year ending March 2027, up from 4.6%, and expects growth of 6.6%, down from 6.9%. Governor Sanjay Malhotra said policy had turned more cautious as escalating energy prices and supply chain strains cloud the outlook. The rupee has weakened more than 6% against the dollar this year, trading at 95.78, while food inflation rose to 4.2% in April. Investors are also watching El Nino risks and a delayed southwest monsoon that could push crop and food prices higher.