India’s monetary policymakers left the repo rate unchanged at 5.25% during the June 3‑5 meeting, reaffirming a neutral stance for a third straight session. Governor Sanjay Malhotra led a six‑member committee that voted unanimously to stay growth‑supportive while monitoring Middle‑East tensions. Deputy Governor Poonam Gupta warned that an early hike could amplify the current supply shock.

The panel cited easing West‑Asia conflict as a reason to avoid pre‑emptive action. Oil prices fell below $75 a barrel, a relief for India, which imports roughly 90% of its fuel. RBI trimmed its FY24 growth outlook to 6.6% and nudged inflation expectations to 5.1%, keeping consumer price gains within its 4% target band.

With inflation contained and the oil reprieve easing cost pressures, markets welcomed the RBI’s steady‑hand approach. Citi economists withdrew their forecast for two rate hikes by March, citing the softer price environment. Investors can now price in a continued neutral policy path, unless a sharp monsoon shortfall reignites food‑price risks that could destabilise inflation expectations.

External member Saugata Bhattacharya flagged deficient rains as a trigger for agricultural price pressure, urging heightened vigilance. Any food‑price surge could prompt the RBI to reassess its stance.