Food inflation is likely to remain contained in FY27 as El Niño risks recede and monsoon conditions remain favourable, while growth risks stay broadly balanced.” In the June meeting, RBI revised its inflation forecasts higher while Q1FY27 headline inflation averaged 3.9 per cent, lower than RBI’s forecast of 4.2 per cent. In June, the Reserve Bank had kept its key policy rate unchanged at 5.25 per cent and adopted a cautious wait-and-watch stance as policymakers assessed the fallout of the West Asia conflict. Moreover, since the Middle East conflict, several central banks, including those in Europe, Australia, Indonesia, the Philippines, Singapore, South Korea and South Africa, have raised benchmark interest rates in response to higher inflation risks. However, the US Federal Reserve and the Bank of Japan have kept rates unchanged.