New Delhi, February 17: The Reserve Bank of India (RBI) is likely to maintain its policy interest rates in the fiscal year 2027, as a slight increase in consumer price index (CPI)-based inflation is anticipated.
A report released by Crisil Ratings on Tuesday indicates that food inflation may stabilize, leading to a potential rise in the CPI. However, lower crude oil prices and the benefits of GST cuts in the first half of the year could keep non-food inflation in check.
According to the report, economic growth is expected to remain around normal trends. The GDP growth rate for FY 2027 is projected to be 6.7 percent, based on the 2011-12 series.
The agency noted that a potential increase in the deflator could exert some pressure on real growth. However, signs of improvement in the central government’s capital expenditure and private investment are expected to boost the economy.
The report also highlighted that the India-U.S. trade agreement has strengthened the rupee’s position, with signs of foreign portfolio investors (FPI) returning. It is estimated that the rupee will stabilize at 89 per dollar by March 2027.
As of February 16, FPIs have made a net investment of $2.8 billion this month, easing pressure on the rupee. The rupee has strengthened from around 92 per dollar at the end of January to approximately 90.7.
While the likelihood of changes in policy rates is low, the impact of previous rate hikes will continue to affect interest rates in the economy.
The Crisil Financial Conditions Index (FCI) remained steady at -0.5 in January, indicating that financial conditions are slightly tighter than the long-term average. However, RBI’s measures have helped maintain balance.
The report stated that RBI’s purchase of government securities under open market operations (OMO) and dollar-rupee buy-sell swaps have supported liquidity in the system. The current easing cycle has led to a 125 basis points (bps) rate cut, which has reduced loan rates and supported bank loan growth.
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My name is Ganpat Singh Choughan. I am an experienced content writer with 7 years of expertise in the field. Currently, I contribute to Daily Kiran, creating engaging and informative content across a variety of categories including technology, health, travel, education, and automobiles. My goal is to deliver accurate, insightful, and captivating information through my words to help readers stay informed and empowered.
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