Indian Rupee: Policy pause offers limited support – Commerzbank
Commerzbank’s Charlie Lay reports that the Reserve Bank of India kept the repo rate at 5.25% for a fourth meeting, maintaining a neutral stance. RBI sees recent inflation overshoot as supply-driven and trimmed its FY2026-2027 inflation forecast while lifting growth to 6.7%.
Commerzbank's Charlie Lay reported that the Reserve Bank of India (RBI) maintained a neutral stance by keeping the repo rate at 5.25% during their fourth meeting. The RBI attributed recent inflation overshoot to supply-driven factors, reducing its FY2026-2027 inflation forecast to 5.0% from 5.1% and raising the growth forecast to 6.7% from 6.6%.
The currency remained one of Asia's weakest this year, with USD/INR dropping to 95.10 due to lower oil prices and strong capital inflows. The RBI's policy statement indicated a wait-and-see approach, as they would only respond if higher food and energy prices led to more widespread inflationary pressures.
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