The Reserve Bank of India (RBI) left its key repo rate unchanged at 5.25% for the fourth consecutive meeting in September and maintained a neutral stance amid a weakening rupee. The decision was in line with market expectations, as the Middle East conflict and global uncertainty threatened GDP growth and fueled inflationary pressures. The annual inflation rate surged to 4.38% in June 2026, marking the highest level since December 2024 and rising above the RBI's 4% target for the first time in 17 months, though it remained within the central bank's 2%–6% tolerance band.