The Reserve Bank of India left its policy rate unchanged after the rupee hit a
record low and announced a package of steps to support the currency while
preserving monetary support for growth. Governor Sanjay Malhotra said the FX
measures should strengthen the external balance and that the RBI will continue
to adjust policy as needed to boost exports and attract capital inflows. The
actions taken Friday signal the central bank prefers non-rate tools to counter
Rupee depreciation amid higher energy-driven inflation risks from the Iran
conflict, rather than immediate rate hikes. The RBI now projects inflation for
the fiscal year to March 2027 at 5.1%, up from a prior 4.6% and above the 4%
target; Malhotra said the bank will wait for clearer inflation dynamics before
tightening.
