RBI MPC Meet: RBI reduces FY26 inflation forecast to 3.7% from 4%

The Reserve Bank of India's Monetary Policy Committee (MPC) has reduced its Consumer Price Index (CPI) inflation projection to 3.7 percent from its earlier projection of 4 percent for FY26, the RBI Governor Sanjay Malhotra announced on June 6. This comes amid a fall in food inflation.

Notably, India’s annual retail inflation had eased to 3.16 percent in April from 3.34 percent in March. This marked the lowest level in nearly six years as food prices rose at a slower pace, government data showed.

Malhotra said that food inflation is expected to remain benign, with easing of international commodity prices in line with the anticipated global growth slow down. He also said that inflation outlook is benign. "Inflation has softened significantly in last six months and remain well below the target. Near term outlook gives us confidence of durable alignment with target, and also undershoot the target," he said.

The RBI Governor noted that services activity should buoy urban demand. Rural demand remains steady, while urban demand is improving.