RBI MPC minutes: Policy misstep fears drove rate pause amid West Asia uncertainty

RBI MPC minutes revealed the central bank kept the policy repo rate unchanged at 5.25% with a neutral stance, citing high uncertainty from the West Asia conflict's impact on crude prices, below-normal monsoon risks, and potential El Niño conditions. The RBI projected GDP growth slowing to 6.6% for 2026-27 (down from 7.6% in 2025-26) and CPI inflation rising to 5.1% (up from 2.1%). Governor Sanjay Malhotra and external members emphasized a data-dependent, risk-management approach, avoiding both premature rate cuts and hikes amid two-way risks to the inflation-growth outlook.