The Reserve Bank of India has flagged persistently elevated energy prices linked to the West Asia conflict as an upside risk to its inflation outlook, even as it kept the repo rate unchanged in its latest policy review. RBI Governor Sanjay Malhotra noted that higher input costs tied to energy prices, along with international freight and insurance costs, could constrain supply chains and weigh on growth.
The central bank said it was taking a wait-and-watch approach given the evolving situation, while noting that government measures aimed at supporting exports and protecting supply chains should help cushion any adverse impact on the domestic economy.
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