Key facts
- RBI Governor Sanjay Malhotra stated the central bank will act if inflation becomes generalised.
- The RBI raised its FY27 inflation forecast to 5.1%.
- The RBI lowered its growth projection to 6.6%.
- The RBI assumes an average crude oil price of $95 per barrel.
- No measures are currently under consideration to restrict capital outflows.
- The RBI is prepared to intervene against excessive currency volatility.
The Reserve Bank of India's (RBI) Monetary Policy Committee (MPC), led by Governor Sanjay Malhotra, has revised its inflation forecast for the fiscal year 2027. The committee has pegged the full-year Consumer Price Index (CPI) inflation for FY27 at 5.1%, an upward revision of 50 basis points from previous projections. The growth projection for FY27 was lowered to 6.6%. The central bank is assuming an average crude oil price of $95 per barrel in its baseline projections. Governor Malhotra emphasized that the RBI remains committed to its inflation mandate and will act if inflationary pressures become generalised, distinguishing between temporary supply-side shocks and persistent inflation. He also stated that no measures are currently under consideration to restrict capital outflows, and the RBI is prepared to intervene against excessive currency volatility. The rupee has lost roughly 5%-6% against the US dollar in 2026. The RBI has unveiled measures to attract foreign currency inflows and support the rupee.