India Monetary Policy RBI MPC Decisions — June 26, 2026
The two RBI filings reveal a mixed monetary landscape: liquidity is tightening with net absorption of ₹1,43,642 Cr, while bank credit growth remains robust at 17.7% YoY, signaling strong demand but potential rate pressure. The new Credit Derivatives Directions (effective June 25, 2026) expand market participation and product scope, which could deepen bond markets and improve credit risk transfer. Foreign exchange reserves dipped by ₹42,457 Cr week-over-week, but gold reserves rose sharply by ₹30,818 Cr, indicating a strategic reserve shift. The money supply (M3) contracted 0.5% fortnightly, suggesting the RBI is managing inflation expectations. Food credit surged 66,289 Cr YoY, reflecting agricultural support. Overall, the data points to a cautious RBI stance, balancing growth support with inflation control, while the derivatives reform opens new hedging avenues for institutions.