India's RBI holds rates as oil-price dip eases inflation worries

The Reserve Bank of India (RBI) kept its policy repo rate unchanged at 5.25% on June 5, with the rate panel adopting a "wait‑and‑watch" stance. Minutes released on June 19 said headline inflation remains within target and core inflation is contained, allowing the committee to retain a neutral stance despite a recent depreciation of the rupee caused by higher oil prices linked to the Iran‑U.S. conflict. RBI officials stressed the need to monitor global and weather‑related uncertainties before any pre‑emptive policy pivot.

Citi economists subsequently revised their outlook, dropping a forecast for two RBI rate hikes through March 2027 after a U.S.–Iran peace agreement pushed oil prices down to multi‑month lows. The lower oil costs reduce pressure on India’s inflation, a major concern for the net oil‑importing economy, and could keep borrowing costs stable for sectors such as real estate, infrastructure, consumer discretionary and banking.