repo rate

Former RBI Governor Duvvuri Subbarao suggests the Reserve Bank should permit further rupee depreciation to manage external shocks, prioritizing liquidity measures over immediate rate hikes if inflation escalates. He emphasizes that a weaker rupee acts as a natural shock absorber, and communication is key to maintaining confidence amidst volatility.

Every Re 1 hike in petrol, diesel, CNG, and LPG costs feeds into inflationary pressures in the economy, and also indirectly impacts discretionary spending, hence hitting growth channels.

All Eyes On June 5 Statement As Gulf Crisis Nears 100 Days

Bank deposit rates are poised for an increase as certificate of deposit (CD) rates surged in May due to tighter liquidity and higher demand for funds. One-year CD rates jumped to 7.70%, signaling that banks are facing pressure to attract deposits, which could soon translate to higher retail rates.

Homebuyers in 2026 face a complex affordability landscape. While loan rates are historically low, rising construction costs and a shrinking supply of affordable homes present challenges. Buyers must honestly assess their finances and consider long-term implications for a sustainable purchase.

Rupee depreciation is not new, what is new however is the rapid pace at which it is falling. It’s the biggest risk for India’s external sector resilience at the moment. In just over a year, the rupee has depreciated over 14%.

India's passenger vehicle market kicked off the new fiscal year with a robust 27% sales surge in April, reaching approximately 4.5 lakh units. Strong performances from Maruti Suzuki, Tata Motors, and Mahindra & Mahindra, fueled by demand for utility vehicles and SUVs, propelled this growth. Despite rising input costs, the industry is experiencing a significant upswing.

For RBI the situation is clear: The resilience of the global economy, already inflicted with trade tensions, is being tested by the conflict in West Asia. The biggest takeaway from the RBI bulletin is that India’s domestic supply chains may come under risk from a prolonged war scenario, though strong macroeconomic fundamentals provide a buffer.

The Reserve Bank of India's decision to maintain the repo rate at 5.25% has been welcomed by real estate stakeholders and homebuyers. This move ensures stability in home loan interest rates, fostering confidence among prospective buyers, particularly in the mid-income segment. Industry experts believe the predictable EMIs will support sustained growth in the real estate sector amidst global uncertainties.

According to RBI governor Malhotra, high frequency indicators till February, 2026 suggest the continuation of strong momentum in economic activity. Growth impulses continue to be supported by robust private consumption and investment demand.

The RBI kept its policy rate at 5.25% for the second consecutive meeting, citing concerns over elevated crude oil prices and global uncertainties. Governor Malhotra expressed cautious optimism, assuring markets that temporary forex measures were aimed at curbing speculation and would be reviewed. The central bank also eased capital norms for banks to support credit growth.

India's real estate sector experienced a robust start to 2026, with private equity investment soaring to USD 1.2 billion in Q1, a 66% year-on-year increase. Office assets dominated, attracting 41% of investments, primarily in Gurugram and Pune. Domestic investors led the charge, signaling renewed confidence despite global economic uncertainties.

Even as it is confident of India’s ability to come out of the fresh global uncertainty, RBI has flagged five risks due to the US-Iran war that could negatively impact the economy.

Global oil markets face turmoil due to the Iran-US conflict and Strait of Hormuz disruptions. India, heavily reliant on oil imports, feels the pinch through rising inflation and borrowing costs. The Reserve Bank of India monitors the situation, opting for stability over aggressive action. Households may experience a gradual tightening of budgets as costs rise and monetary easing is delayed.

The central bank governor is of the view that this will provide the Indian economy with ‘greater resilience’ to withstand shocks. However, the downside risks to growth projections remain, especially in case of a prolonged West Asia conflict.

India’s balanced geopolitical approach has helped mitigate risks. Strong relationships across key global blocs have enabled continued access to energy and trade routes, positioning India relatively well in a fragmented global environment.

A temporary ceasefire between Iran and the US is reshaping global markets. Oil prices have dropped significantly as the Strait of Hormuz sees cautious reopening. Stock markets worldwide are experiencing a strong rally, with Indian markets showing substantial gains. This development offers relief from geopolitical tensions and supports economic stability.

The Reserve Bank of India has unveiled its Monetary Policy Committee meeting schedule for the 2026-27 financial year, with the first review set for April 6-8. The six-member panel, tasked with managing inflation and setting benchmark rates, will convene six times throughout the year. This announcement coincides with an upcoming review of India's inflation targeting framework.