The Reserve Bank of India’s Monetary Policy Committee (MPC) has sharply reduced its inflation forecast for FY2026 to 2.6%, down from 3.1%, citing GST rate cuts, improved food supply, and easing price pressures. The committee held the repo rate steady and maintained a neutral stance, signaling flexibility amid global volatility. Advertisement

RBI governor Sanjay Malhotra said the inflation outlook has “turned even more benign” in recent months. “A sharp decline in food prices and the rationalisation of GST rates” contributed to the downgrade, he noted.

The quarter-wise estimates reflect continued softness in prices, with inflation projected at 1.8% for Q2 and Q3, before rising to 4.0% in Q4. While inflation ticked up to 2.07% in August from an eight-year low of 1.55% in July, it remains

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