RBI MPC speech: Weak monsoon, strong El Nino, Rabi season, global crude prices - What Governor Sanjay Malhotra conveyed

Reserve Bank of India (RBI) Governor Sanjay Malhotra announced that the Monetary Policy Committee (MPC) had hiked the repo rate by 25 basis points to 5.5 per cent, marking the first increase in over three years, in a move to control rising inflation amid a continuing crisis in West Asia. RBI MPC speech: Weak monsoon, strong El Niño, Rabi season, global crude prices - What Governor Sanjay Malhotra conveyed (Agencies) Reserve Bank of India (RBI) Governor Sanjay Malhotra on Wednesday announced that the Monetary Policy Committee (MPC) had hiked the repo rate by 25 basis points to 5.5 per cent, marking the first increase in over three years, in a move to control rising inflation amid a continuing crisis in West Asia. According to a PTI report, the RBI's last repo rate hike was in February 2023, when the central bank raised it by 0.25 percentage points to 6.50 per cent. Between 2023 and 2024, it kept the repo rate unchanged before the rate-cut cycle began in 2025. At the bi-monthly monetary policy meeting, the RBI Governor said the MPC had unanimously decided to raise the policy repo rate by 25 basis points and had also changed its stance to 'calibrated tightening' from 'neutral', indicating that a rate cut in the near term was unlikely under the current conditions. Here's what the RBI Governor Sanjay Malhotra conveyed: 1. The central bank governor highlighted the sudden re-escalation in the West Asia conflict and said the "consequent hardening, as well as volatility in global crude prices, soured global economic sentiments and heightened financial market volatility." He added that while global growth continues to be resilient, it is estimated to decelerate this year with respect to the previous year. Malhotra further said, "Driven by escalating energy costs and rising food prices, global inflation is projected to increase sharply, prompting monetary policy tightening by major central banks across the world. Lingering trade uncertainty, rising bond yields in advanced economies, and an appreciating dollar are keeping global financial market sentiments nervous and fragile. Further tightening of global financial conditions, uncertainty about the fair valuation of AI stocks, and an elusive resolution of the West Asia conflict pose significant downside risks. 2. Sanjay Malhotra, during the bi-monthly meeting, stated that a weak monsoon, along with El Nino is likely to impact the upcoming Rabi season in the country. 3. The Governor announced that the MPC had revised its GDP growth projection for 2027 upwards by 40 basis points to 7.1%, while warning that persistent geopolitical tensions could threaten the economic outlook. He said India’s economy remained resilient despite global challenges, with real GDP expanding by 7.8% in the first quarter of 2026-27. This story will be updated with more details. About the Author Swati Gandhi Swati Gandhi is a digital journalist with over four years of experience, specialising in international and geopolitical issues. Her work focuses on foreign policy, global power shifts, and the political and economic forces shaping international relations, with a particular emphasis on how global developments affect India. She approaches journalism with a strong belief in context-driven reporting, aiming to break down complex global events into clear, accessible narratives for a wide readership.<br><br> Previously, Swati has worked at Business Standard, where she covered a range of beats including national affairs, politics, and business. This diverse newsroom experience helped her build a strong grounding in reporting, while also strengthening her ability to work across both breaking news and in-depth explanatory stories. Covering multiple beats early in her career has helped her be informed about her current work, allowing her to connect domestic developments with wider international trends.<br><br> At Live Mint, she focuses on international and geopolitical issues through a business and economic lens, examining how global political developments, foreign policy decisions, and power shifts impact markets, industries, and India’s strategic and economic interests.<br><br> She holds a Bachelor’s degree in English (Honours) from the University of Delhi and a Master’s degree in Journalism and Mass Communication from Guru Gobind Singh Indraprastha University. Her academic training has shaped her emphasis on precision, analytical rigour, and clarity in writing. Her interests include global political economy and the intersection of geopolitics with business.<br><br> Outside work, Swati focuses on exploring her passion and love for food. From fancy cafes to street spots, Swati explores food like a true foodie.