The Reserve Bank of India (RBI) left its key repo rate unchanged at 5.25% for the second straight meeting and maintained a neutral stance during its first monetary policy decision of fiscal year 2026/27, amid a weakening rupee and rising bond yields. The decision was in line with market forecasts, as the Iran war threatened GDP growth and fueled inflationary pressures. On the economic outlook, the RBI raised its GDP growth forecast for FY2025/26 to 7.6%, up from its earlier estimate of 7.4%, while inflation is expected to remain below the central bank's target of 4%. Meanwhile, GDP growth for FY2026/27 is estimated at 6.9%, with growth for the first quarter of the fiscal year projected at 6.8%, while the second quarter has been revised down to 6.7% from 7%. Inflation for FY27 is projected at 4.6%, with 4% for Q1, 4.4% for Q2, 5.2% for Q3, and 4.7% for Q4. The RBI also maintained the SDF rate at 5.0% and the MSF rate at 5.50%.