WEST ASIA CONFLICT
AI asset valuations pose global risk, but cyber threat biggest concern for central banks: RBI Governor
The Governor made the remarks in response to an question at the post-policy press conference, after the RBI flagged elevated AI-related asset valuations among the key downside risks to the global economy.
RBI GDP Growth 2026: Malhotra & Co raise FY27 GDP forecast to 7.1% from 6.7%
RBI GDP Growth 2026: The Reserve Bank of India has updated its growth forecast for fiscal year 2026-27 to 7.1%. This adjustment comes after stronger-than-expected economic performance, including 7.8% growth in the June quarter. The RBI has also raised the policy repo rate to 5.5% while changing its policy stance to calibrated tightening. While domestic consumption remains resilient, global challenges and inflation concerns persist.
RBI Inflation FY2026-27: Malhotra & Co raises inflation forecast to 5.2% for FY27
RBI Inflation 2026-27 Forecast: The Reserve Bank of India has updated its inflation forecast for FY27 to 5.2% from 5.0% previously. This revision comes as retail inflation exceeds the RBI's target for three consecutive months. The rise in crude oil prices and food costs is a significant contributing factor. Additionally, a weaker rupee adds to imported commodity expenses and inflationary pressures. El Niño is also expected to impact food supply, further influencing inflation.
RBI MPC Meeting 2026: West Asia conflict keeps global outlook uncertain, says Sanjay Malhotra
The Reserve Bank of India has raised the policy repo rate by 25 basis points to 5.50%. This increase is the first since February 2023 amid economic uncertainties both domestically and globally. Geopolitical developments have contributed to instability in global markets, affecting economic activity. Despite these challenges, the RBI noted that the Indian economy remains strong with broad-based momentum.
Four horsemen of economic trouble? RBI governor flags the risks spooking the world
The RBI raised the repo rate 25 bps to 5.50%, its first hike in nearly four years, and shifted its stance to calibrated tightening. Governor Sanjay Malhotra flagged four global risks: West Asia tensions and volatile oil prices, tariff uncertainty, elevated bond yields and stretched AI stock valuations. He said these risks are clouding global sentiment despite resilient growth.
RBI MPC Meeting at a Glance: Your one step guide for all decisions
RBI Monetary Policy Meeting Highlights: The Monetary Policy Committee has raised the policy repo rate by 25 basis points to 5.50%. RBI Governor Sanjay Malhotra indicated that inflation pressures are increasing and rate cuts are not expected soon. The Indian economy continues to show resilience, with GDP growth projected at 7.1% for the year. Inflation is forecasted at 5.2%, with core inflation expected to be around 4.4%.
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S&P projects 12-14% credit growth this fiscal, warns weak monsoon may hit rural lending
S&P Global forecasts a 12-14% increase in financial sector lending despite potential slowdowns in rural areas. Concerns about weak monsoon rains may negatively impact rural incomes and lending. A projected GDP growth of 7% for India in FY27 reflects steady public investment and improved private sector investments. Economic activity remains strong, although headwinds like inflation could constrain momentum.
S&P sees 12-14% credit growth in India despite rural stress risks
S&P has projected credit growth of 12-14% in India's financial sector, emphasizing concerns about rural credit growth. The potential impact of weak monsoons on agricultural earnings could further exacerbate credit challenges. Economic activity exhibits resilience, supported by strong capital positions of banks and lenders. Public investment remains steady while private investment focuses on specific sectors, showing improvement. Inflation is projected at 5.1% for FY27, amidst challenges from global factors.
Federation of Indian Airlines seeks review of existing ATF pricing formula
The Federation of Indian Airlines highlighted the significant impact of rising jet fuel costs on airline operations. They emphasized that current pricing formulas are insufficient due to ongoing geopolitical issues and currency fluctuations. The FIA requested a shift to a 'Cost Plus' pricing model for Aviation Turbine Fuel. They also noted the need for government support to maintain affordable air travel for passengers.
Federation of Indian Airlines seeks Centre's intervention for faster release of ECLGS 5.0 funds
Indian airlines have requested the Civil Aviation Ministry's assistance in securing timely credit disbursements under ECLGS 5.0. The Federation of Indian Airlines aims to alleviate the severe financial strain caused by rising fuel costs and other factors. ECLGS 5.0 provides significant financial relief to eligible airlines impacted by current global disruptions. The scheme is designed to support airlines through short-term liquidity challenges during the ongoing crisis.
Double trouble at the dinner table: When will food prices normalise for Indians?
India’s food inflation: Food prices are rising unevenly, impacting household budgets, while inflation is projected to persist in upcoming months. Economists expect food inflation to reach up to 7% in the near future due to various factors. Weather risks, particularly from El Niño, could significantly affect crop yields and consequently food prices. Additionally, global events in West Asia contribute to higher energy and logistic costs.
$100/barrel crude on screen, $145/barrel in physical market: Kotak Securities sees two prices
Crude oil’s physical market price could reach nearly $145 a barrel even if benchmark prices show $100, as soaring VLCC shipping costs widen the gap, Kotak Securities’ Anindya Banerjee said. He expects India to remain protected by ample refining capacity and diversified supplies, while predicting RBI rate hikes in October and December as liquidity remains abundant.
'Iran signed NPT, India did not...situation is very different': Jaishankar highlights distinctions, deepening global energy crises amid West Asia turmoil
External Affairs Minister S Jaishankar said India's non-signatory status under the NPT gives it a different position from Iran, which is an NPT signatory, while stressing that India's immediate concern is the impact of the West Asia conflict on energy and trade. He called for restoring uninterrupted supply and trade flows.
RBI likely to hike repo rate by 25 bps to 5.50% in October policy: ET Poll
On Monday, the Reserve Bank of India's Monetary Policy Committee will hold important meetings. Analysts are anticipating a 25 basis points increase in the key interest rate, raising it to 5.50%. The surge in inflation is attributed to elevated crude oil costs and subpar agricultural production. Many economists advocate for a rate hike as a crucial measure to tackle ongoing inflation issues, with outcomes to be revealed on October 7.
Rate cut cycle near turning point. What lies ahead for Indian bonds?
The RBI is expected to signal monetary tightening at its October policy meeting as stronger economic growth, rising oil prices and elevated US Treasury yields fuel inflation concerns. Higher domestic rates could support the rupee but raise borrowing costs for the government and companies while pressuring equities and consumption.
Russian crude to remain part of energy mix: Jaishankar to Panel
As traditional oil suppliers face challenges, India's significant reliance on Russia for crude oil came into focus. External Affairs Minister S. Jaishankar highlighted the critical nature of sustaining robust relations with Moscow, amid growing external pressures. During their discussions, delegates examined strategies for diplomatic conflict resolution regarding Ukraine while also addressing concerns over impending US tariffs on Russian imports, demonstrating India's commitment to both energy security and international diplomacy.
RBI remains cautious on crypto, backs underlying technology: Governor Sanjay Malhotra
India's cautious approach towards cryptocurrencies emphasises the importance of underlying technologies like distributed ledger and tokenisation. RBI Governor Sanjay Malhotra expressed concerns regarding monetary sovereignty and its effects on capital flows. While domestic payments are efficient, challenges remain in cross-border transactions, which may benefit from central bank digital currencies. The rising public debt and bond yield movements reflect the increased spending attributed to artificial intelligence.
RBI rate hike unlikely to trigger broad-based NBFC asset quality stress: Report
A report from Nuvama Institutional Equities indicates that a potential RBI rate hike may not significantly stress NBFC asset quality. Past trends suggest that rate increases alone typically do not lead to widespread deterioration. Current impacts from the West Asia conflict have been limited to specific segments and are not broadly felt. Additionally, healthy capital buffers and systemic liquidity are expected to mitigate potential risks.
RBI Governor Sanjay Malhotra flags rising financial risks, warns against complacency as West Asia conflict adds to inflation pressure
Sanjay Malhotra highlighted the need for vigilance regarding financial vulnerabilities at the Kautilya Economic Conclave. He emphasized that banking and financial stress can develop suddenly yet take years to resolve. Malhotra pointed out the interplay of geopolitical and economic factors complicating current financial stability predictions. He stressed the Reserve Bank of India's role in maintaining financial resilience through appropriate regulations and supervision.
Largecaps face investor apathy, mid and smallcaps fuel euphoria: Kotak Institutional Equities
Investor sentiment towards large-cap stocks is currently apathetic, despite improved valuations in the market. Retail investors are increasingly enthusiastic about mid- and small-cap stocks, enjoying recent positive developments in those sectors. The ongoing West Asia conflict and declining stock prices contribute to investor despair among large caps. Meanwhile, small and mid-cap sectors attract retail investors due to their potential for quick returns.
Rating upgrades moderate in H1 as India Inc faces multiple headwinds
Rating upgrades moderated in the first half of the financial year as companies faced headwinds from the West Asia conflict, rising crude prices, higher input costs and evolving US tariff measures. Downgrades also declined, though rating agencies cautioned that this may not capture cases where issuers do not cooperate with adverse reviews.
Enhanced insurance cover for West Asia exports extended to March 2027
Indian exporters will continue to receive upgraded insurance protection against buyer payment defaults until March 31, 2027. The expanded coverage is part of an initiative to support exporters during ongoing challenges. Previously, the eligibility was set to expire after September 30, affecting shipments to West Asia.
‘Major food crisis’ looms in coming months: S Jaishankar
S. Jaishankar highlighted the looming food crisis caused by fertiliser shortages from geopolitical tensions in Ukraine and the Gulf. He emphasized that these issues are overwhelming Global South economies and worsened by disrupted energy markets. The Minister raised concerns about major grain exporters struggling to send shipments, impacting food security worldwide.
Corporate credit profile remains strong in H1FY27 despite West Asia conflict: Ind Ra
Indian companies' credit profiles showed resilience during the first half of fiscal year 2026-27. Despite the energy shock from the West Asia conflict, rating actions remained limited to a few issuers. The supportive domestic environment contributed to sustaining household purchasing power and controlling inflation. Strong revenue growth was noted across various sectors, with significant upgrades in investment-linked domains.
Iran Rial hits record low
Iran's currency, the rial, has fallen to over 2.5 million rials against the US dollar recently. This decline reflects the negative impact of the ongoing conflict in West Asia on Iran's economy. The rial previously hit a record low of 2.2 million to the dollar just 27 days ago. Iranian diplomats indicated that negotiations with the United States concerning the Strait of Hormuz are gaining seriousness.
Global economy is shifting East, Global South must seize the moment: Shaktikanta Das
The Principal Secretary-2 Shaktikanta Das outlined the challenges and opportunities facing Global South economies during recent discussions. Energy shocks, trade barriers, and geopolitical uncertainties pose significant risks for these nations as they adapt. Strategies focused on food security, trade diversification, and job creation are essential for future resilience. Additionally, rising protectionism complicates access to global markets and technologies for low- and middle-income countries.
Kazakhstan echoes Indian approach to end wars through diplomacy
During a speech at the UN General Assembly, Kazakhstan's Foreign Minister Mukhtar Tileuberdi voiced his apprehensions about the persistent conflicts, particularly the situation in Ukraine. He underscored the necessity for diplomatic approaches to enhance both regional security and economic stability.
Russian crude cushioned India from oil shock, says Andrey Rudenko
Russian deputy foreign minister Andrey Rudenko highlighted the reliability of Moscow as an energy partner. He stated that Russian oil supplies helped India during recent oil-supply delays caused by conflict in West Asia. Rudenko emphasized that existing arrangements with India significantly mitigated disruptions in global energy trade. Moscow's ability to meet demand even in difficult geopolitical conditions was also noted.
India, GCC review cooperation, welcome launch of FTA negotiations at New York meeting
India and the Gulf Cooperation Council held a Troika Ministerial Meeting to review their Joint Action Plan. The meeting included discussions on regional and international issues, including the situation in West Asia. External Affairs Minister S Jaishankar led the Indian delegation to the 81st session of the United Nations General Assembly. Leaders reaffirmed their commitment to enhancing trade, investment, and cultural ties.
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