RBI Keeps Repo Rate Steady as India's Balance of Payments Surplus Grows

The Reserve Bank of India (RBI) has maintained its neutral stance on monetary policy by keeping the repo rate at 5.25%, despite lowering inflation forecasts and nudging growth higher.

This decision, combined with strong capital inflows, has put India's balance of payments on track for a healthy surplus, providing a buffer for the Indian Rupee (INR) against the US Dollar (USD).

The RBI has attracted nearly $41 billion in capital inflows since its recent measures were implemented, including $36.7 billion from FCNR deposits and $2.57 billion through overseas foreign currency borrowings.

Governor Sanjay reiterated that the exchange rate should remain market-determined, while the RBI would curb excessive volatility and prevent moves detached from fundamentals.