RBI Faces Liquidity Surplus of Rs 9.7 Lakh Cr, May Use CRR/OMO to Drain Excess

RBI's Forex Swap Facility Attracts $136.3 Billion, Reserves at Record $729 Billion, Liquidity Surplus Rises

The RBI's measures to boost capital flows have massively exceeded expectations, with $136.3 billion in inflows through the forex swap facility, pushing forex reserves to a record $729 billion. However, this has created a liquidity surplus of Rs 6.7 lakh crore, complicating inflation management and looming rate hike decisions. This is critical for understanding India's external stability and the RBI's monetary policy challenges.

IIP August 2026: Manufacturing Output Rises 9%, Consumer Durables Up 11.1%

India's industrial output (IIP) grew 8% in August 2026, driven by manufacturing (9% growth) and a favourable base effect from pre-GST rate cut inventory adjustments in 2025. While consumer durables posted strong 11.1% growth, the slow 2.1% rise in non-durables signals weak rural/FMCG demand, a key concern for the upcoming festive season.

RBI MPC Keeps Repo Rate at 5.25%, Hikes GDP Growth to 6.7%, Lowers Inflation to 5%

RBI's MPC kept the repo rate unchanged at 5.25% for the second consecutive meeting, balancing growth and inflation amid global uncertainties. GDP growth forecast for FY27 was marginally hiked to 6.7%, while inflation projection was cut to 5%. This decision impacts loan EMIs, deposit rates, and the overall economic outlook, making it a critical topic for exams covering monetary policy and economic indicators.

RBI Holds Repo Rate at 5.25% as CPI Inflation Hits 4.38% in June; Forex Reserves Near $700 Bn

RBI's MPC kept repo rate unchanged at 5.25% for the fourth time, prioritizing growth despite CPI inflation rising to 4.38% in June, above the 4% target. Elevated global crude prices and geopolitical uncertainties are key concerns. The central bank is using tools like dollar-rupee swaps and FCNR(B) deposits to manage liquidity and shore up forex reserves near $700 billion, while the rupee recovers to around ₹95.

RBI Holds Repo Rate at 5.25%, Focuses on Core Inflation Ex Precious Metals

RBI kept repo rate unchanged at 5.25% but signaled a focus on core inflation excluding precious metals (currently 2.5%) as the 'lodestar' for policy. This puzzling communication suggests potential rate hikes later if core inflation converges, even as headline CPI is expected above 4% target. Key for understanding RBI's inflation targeting approach and market expectations.

India's July Retail Inflation Rises to 4.45%, RBI Holds Repo Rate at 5.25%

India's July retail inflation rose to 4.45%, the highest in 19 months, driven by food and transport costs. The RBI's MPC held the repo rate at 5.25% for the fourth consecutive meeting, balancing persistent supply-side inflation against weakening economic momentum. This is critical for exams as it tests your understanding of inflation dynamics, MPC decision-making, and the interplay between global disruptions (Ukraine-Russia) and domestic prices.

RBI Worried as Aug 2026 CPI Inflation Hits 8-Month High of 4.82%; Sugar & Chip Prices Surge

India's August 2026 retail inflation rose to 4.82% (8-month high), driven by a 24% YoY jump in sugar prices and rising memory chip costs ('chipflation'). This puts pressure on the RBI's Monetary Policy Committee to hike the repo rate for the first time in 3.5 years. For exam aspirants, this is a classic case of supply-shock inflation testing central bank credibility.

RBI Holds Repo Rate at 5.25%; SC Judges Bill Passed as Money Bill; FCRA Amendment Sparks Controversy

This compilation covers critical current affairs for UPSC: the FCRA Amendment Bill facing opposition over asset vesting provisions, the Supreme Court (Number of Judges) Amendment Bill passed as a Money Bill despite controversy, RBI maintaining repo rate at 5.25% with a neutral stance and planning polymer banknotes launch, a new Supreme Court gender sensitivity report replacing the 2023 handbook, and Kerala's worsening floods linked to sedimentation and urbanization. All topics have high Prelims and Mains potential.