The Reserve Bank of India (RBI) has maintained the status quo on repo rate at 5.25% in its first monetary policy decision since the Iran war broke out.
The RBI's six-member Monetary Policy Committee voted unanimously to keep the benchmark repo rate at 5.25%, matching all economist estimates in a Bloomberg survey.
The policy stance was retained at neutral, with the RBI governor stating that high-frequency indicators indicate sustained momentum and economic activity.
Amid the Iran war, RBI now sees India's inflation rate at 4.6% in FY27 with core inflation likely to come in at 4.4%.
India is expected to grow faster at a real GDP growth rate of 7.6% versus 7.4% earlier, with quarter-wise GDP growth estimates ranging from 6.8% to 7.2%.
The neutral stance provides the ability to be nimble with policy shifts in case the war is more prolonged than assumed.
The RBI's primary concern is the rupee's slide since the start of the Iran war, which has emerged as one of Asia's worst-performing currencies.
India's forex reserves rose to $697.1 billion as of 3 April, down from a record high of $728.49 billion in late February, primarily due to RBI intervention to stabilise the rupee.
