Decoding RBI Repo Rate: Foreign Investors Get RBI Boost As Investment Caps Rise & Rules Are Relaxed

The RBI has kept the repo rate unchanged at 5.25% while maintaining a neutral stance, reflecting caution amid rising inflationary pressures and increasing global uncertainties. RBI Governor Sanjay Malhotra has also revised the FY27 CPI inflation forecast upward to 5.1% from 4.6%, while lowering the GDP growth projection to 6.6% from 6.9%. Rumki Majumdar, Economist at Deloitte. explains why the central bank is likely to remain on an extended pause, how crude oil prices, food inflation, El Niño-related weather risks, and geopolitical tensions in West Asia could influence future policy decisions, and why the possibility of rate cuts appears limited in the near term. Rumki also decodes the RBI’s efforts to attract foreign capital through liberalized FPI norms for government securities and higher investment limits for NRIs and OCIs. With the rupee gaining ground against the US dollar and markets reacting sharply to the policy announcement. Watch the full interview for expert insights into India's inflation outlook, growth prospects, interest rate trajectory, and the broader economic landscape.