The Reserve Bank of India (RBI) has decided to keep its key policy rate, the repo rate, unchanged at 5.25% in light of heightened geopolitical risks stemming from the ongoing conflict in West Asia. RBI Governor Sanjay Malhotra highlighted that the conflict could lead to increased oil prices, rising agricultural inflation, and weakened remittance inflows, which may adversely affect domestic consumption and investment. The monetary policy committee (MPC) unanimously agreed to maintain a neutral stance, acknowledging the challenges posed by global supply chain disruptions. As a result, the RBI has revised its growth estimate for fiscal year 2027 down to 6.9%, while inflation projections have been increased to 4.6%. The MPC emphasized that the risks to the inflation outlook have escalated due to energy price pressures and potential weather disturbances affecting food prices. Despite these challenges, domestic growth remains supported by robust private consumption and investment demand. The Indian rupee appreciated by 0.53% to 92.51/$, and the benchmark BSE Sensex rose by 3.74% to 77,409.28. To address market conditions, the RBI will allow additional non-bank entities to borrow in the call market and enhance borrowing limits for primary dealers.