India's central bank holds rates steady amid geopolitical tension. The Reserve Bank of India maintained its benchmark policy rate at 5.25% on Wednesday, as economists had anticipated. However, Governor Sanjay Malhotra warned that the Iran conflict poses significant risks to both inflation and economic growth. The RBI lowered its GDP growth forecasts for the coming quarters, citing elevated energy prices and potential supply disruptions through the Strait of Hormuz. Consumer inflation rose to 3.21% in February, marking the fourth consecutive monthly increase. While India remains the world's fastest growing large economy, the Middle East conflict threatens to disrupt critical commodity supplies including oil and fertilizers, potentially straining both growth and inflation trajectories through March 2027.
