RBI Governor Sanjay Malhotra
Mumbai: The Reserve Bank of India (RBI) RBI projects GDP growth at 6.7 per cent for the financial year 2026–27.
Announcing the Monetary Policy Committee (MPC) decision, RBI Governor Sanjay Malhotra confirmed that the central bank kept the repo rate unchanged at 5.25 per cent with a neutral policy stance. Stronger-than-expected economic performance during the April–June quarter directly prompted this upward growth revision.
[MPC Policy Decision] ──▶ Repo Rate Kept Unchanged at 5.25% ──▶ Neutral Policy Stance
│
[Revised FY27 Growth Target: 6.7%] ◀──( Resilient Domestic Demand )──────┘
Lowering Inflation Projections Amid Resilient Demand
Significantly, the central bank struck an optimistic note on macroeconomic stability by raising growth estimates while trimming price pressure forecasts.
The RBI lowered its Consumer Price Index (CPI) inflation projection to 5 per cent for FY27, down from the earlier estimate of 5.1 per cent. Governor Malhotra noted that recent price spikes stemmed primarily from localized food and fuel costs rather than broad-based demand pressures.
Key RBI Monetary Policy Highlights:
Real GDP Growth Forecast: Upgraded to 6.7 per cent for FY27.
CPI Inflation Target: Reduced to 5 per cent from 5.1 per cent.
Sovereign Repo Rate: Maintained at 5.25 per cent.
Foreign Exchange Reserves: Stands strong at $693 billion (10+ months import cover).
Furthermore, robust exports, steady investment activity, and easing supply chain bottlenecks continue to support India’s trajectory as the world’s fastest-growing large economy.
Forex Stability and Polymer Currency Rollout
On the external front, foreign direct investment (FDI) inflows remained resilient, while foreign portfolio investment (FPI) recorded a sharp turnaround.
[Forex Reserves: $693 Billion] ──▶ Import Cover Exceeds 10 Months ──▶ Shields Economy
Addressing the media, Governor Malhotra also revealed that the RBI plans to introduce durable polymer bank notes into circulation by the beginning of the next financial year. Concurrently, Deputy Governor Rohit Jain confirmed expanding user adoption for the Central Bank Digital Currency (CBDC) and the Unified Lending Interface (ULI).
RBI Monetary Policy Framework (FY27)
| Policy Parameter / Indicator | Current Official Level / Target | Core Economic Driver | Strategic Outlook Impact |
| Real GDP Growth Rate | 6.7 Per Cent (Upgraded) | Q1 performance and resilient domestic demand. | Reaffirms India as the fastest-growing economy. |
| Repo Interest Rate | 5.25 Per Cent (Unchanged) | Neutral monetary stance. | Maintains balanced liquidity and borrowing costs. |
| CPI Inflation Projection | 5.0 Per Cent (Reduced) | Easing supply-side disruptions. | Protects consumer purchasing power. |
| Foreign Exchange Buffer | ~$693 Billion | Strong FDI and rebounding FPI flows. | Provides over 10 months of import protection. |
| Currency Innovation | Polymer Notes Rollout | Enhanced note durability and security. | Modernizes physical cash infrastru |
About the Author
