RBI Monetary Policy Committee Revises Inflation Projection Upward for Fiscal Year 2026
The Reserve Bank of India (RBI) announced a significant update to its monetary policy outlook on Friday, 6 February 2026, during the latest meeting of its Monetary Policy Committee (MPC). In a move that has captured the attention of financial markets and economic observers, the central bank has revised its inflation estimate upward for the fiscal year 2025-2026.
Updated Inflation Forecasts and Quarterly Projections
The RBI now projects Consumer Price Index (CPI) inflation at 2.1% for FY26, marking an adjustment from the previously estimated 2.6%. This revision reflects the central bank's latest assessment of economic conditions and price stability trends. The detailed quarterly breakdown provides further insight into the inflationary trajectory:
- Q3 FY26: Inflation is projected at 0.6%
- Q4 FY26: The estimate stands at 2.9%
- Q1 FY27: Forecast indicates 3.9% inflation
- Q2 FY27: Projection reaches 4.0%
These figures highlight a gradual upward trend in inflation expectations as the economy progresses through the fiscal years.
Governor's Statement on Risk Assessment
RBI Governor Sanjay Malhotra addressed the media following the policy announcement, emphasizing that "the risks to the inflation outlook are evenly balanced." This statement suggests that while inflationary pressures are being monitored closely, the central bank sees both upward and downward risks as equally probable, indicating a measured approach to monetary policy adjustments.
The upward revision in inflation estimates comes amid ongoing economic assessments and global financial conditions that influence domestic price stability. The RBI's MPC continues to evaluate multiple factors including food prices, fuel costs, and core inflation components while formulating its policy stance.
This policy announcement forms part of the RBI's regular monetary policy review cycle, where the committee assesses economic indicators and sets the course for interest rates and liquidity management. The revised inflation projections will likely influence future policy decisions as the central bank balances growth objectives with price stability mandates.
