RBI MPC Meet: RBI reduces FY26 inflation forecast to 4% from 4.2%

RBI Governor Sanjay Malhotra

The Reserve Bank of India's Monetary Policy Committee (MPC) has reduced its Consumer Price Index (CPI) inflation projection to 4 percent for FY26, the RBI Governor Sanjay Malhotra said on April 9. This comes amid a fall in food inflation.

CPI inflation for FY26 has been projected at 4 percent, with Q1 at 3.6 percent, Q2 at 3.9 percent, Q3 at 3.8 percent and Q4 at 4.4 percent, the RBI Governor added.

During its last meeting held in February, the MPC had kept its inflation forecast at 4.2 percent for FY26.

Notably, India's retail inflation had eased to a seven-month low of 3.61 percent in February, with food inflation below 4 percent for the first time in nearly two years.

Food inflation had eased to 3.75 percent in February, its lowest reading in 21-months, as vegetables prices declined 1.1 percent from the previous year. The RBI Governor noted that despite the fall in food inflation, the MPC remains vigilant about the global uncertainties, driven by US President Donald Trump's tariffs.

The central bank has changed its stance from 'Neutral' to 'Accommodative'.

The RBI has also reduced its repo rate by 25 bps to 6 percent. This comes after a 25-bps rate cut in February, which was the first rate cut since May 2020. In May 2020, the RBI had lowered the repo rate to 4 percent to cushion the economy from the COVID-19 pandemic's impact. Since then, the central bank has raised the repo rate seven times to 6.5 percent.

(This is a developing story. Come back later for more updates)