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RBI Holds Repo Rate at 5.25%, Cuts FY27 GDP Growth Forecast to 6.6% and Raises CPI Inflation Projection to 5.1%

Target:UPSC GS-IIIMPSCBankingSSC GATeachingPrelims HighMains MediumStatic GK Link
04 Jun 2026
~2 min
Source: Indian Express
Key Data:Repo rate 5.25%FY27 GDP growth 6.6%FY27 CPI inflation 5.1%Core inflation 4.7%Inflation target 4% (2-6% band)
Bodies:RBIMonetary Policy Committee (MPC)Ministry of Statistics and Programme Implementation (MoSPI)
Practice MCQs from today's news ▸
What This Article Covers

1.RBI MPC kept the policy repo rate unchanged at 5.25% and retained its 'neutral' stance unanimously.

2.GDP growth forecast for FY27 was cut to 6.6% (from 6.9%) while CPI inflation projection was raised to 5.1% (from 4.6%), citing energy price shocks.

3.Quarterly projections show inflation nearing the upper tolerance band of 6% by Q3 FY27, a critical data point for exam questions on inflation targeting.

The Big Picture
Prelims · HighMains · Medium

The RBI's Monetary Policy Committee maintained the status quo on key rates but delivered a significant downward revision of India's growth forecast for FY27 to 6.6% from 6.9%, alongside an upward revision of inflation to 5.1% from 4.6%. This signals a cautious outlook due to risks from elevated energy prices and global supply constraints, crucial for understanding the current macroeconomic stance for UPSC and Banking exams.

Exam Lens

Quick Exam Facts From News

Policy Repo Rate5.25% (unchanged)
FY27 GDP Growth Forecast6.6% (revised down from 6.9%)
FY27 CPI Inflation Forecast5.1% (revised up from 4.6%)
MPC StanceNeutral (unanimous)
Core Inflation Forecast FY274.7% (revised up from 4.4%)
Inflation Target (medium-term)4% within 2-6% band

1-Minute Revision

  • ›Policy Repo Rate: 5.25% (unchanged)
  • ›FY27 GDP Growth Forecast: 6.6% (revised down from 6.9%)
  • ›Target this Data: FY27 GDP forecast at 6.6% and CPI inflation at 5.1%.
  • ›Target this Nodal Body: The six-member Monetary Policy Committee (MPC) of the RBI.
  • ›Target this Legal Point: RBI's mandate to target 4% CPI inflation within a 2-6% band.

Mastered this topic? Test your knowledge with a full MCQ quiz.

Practice exam-style questions, track your score, and strengthen your recall.

Q1Static LinkageEasy

Which committee of the Reserve Bank of India is responsible for deciding the policy repo rate?

Q2Statement-basedHard

Consider the following statements regarding the RBI's Monetary Policy announced in June 2026:

1. The Monetary Policy Committee decided to increase the policy repo rate.

2. The RBI revised its GDP growth forecast for FY27 upwards to 6.9%.

3. The core inflation forecast for the current year was increased to 4.7% from 4.4%.

Which of the statements given above is/are correct?

Q3Data-centricMedium

According to the RBI's June 2026 monetary policy, what is the projected Consumer Price Index (CPI) inflation for the quarter October-December 2026 (Q3 FY27)?

Q4Application/ImpactMedium

What is the primary implication of the RBI raising its core inflation forecast, as mentioned in the news?

All 20 MCQs ▸
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