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Criticizing RBI's inaction amid rising inflation

Published July 10, 2026 at 10:34 PM UTC

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The Reserve Bank of India's (RBI) decision to maintain the repo rate unchanged in the face of rising retail inflation raises significant concerns. With the Consumer Price Index (CPI) inflation reaching 3.93% in May 2026, driven by escalating food and fuel prices, the RBI's inaction appears to be a missed opportunity to curb inflationary pressures. Economists have warned that if inflation continues to rise unchecked, it could surpass the RBI's upper tolerance band of 6%, leading to increased cost of living and eroding consumer purchasing power. The RBI's reluctance to adjust the repo rate may be due to fears of stifling economic growth; however, this cautious approach could be counterproductive. By not acting decisively, the RBI risks allowing inflation to become entrenched, making future policy interventions more challenging and potentially more disruptive. The global economic context, including the West Asia conflict, has contributed to higher energy prices, exacerbating domestic inflation. In this scenario, the RBI's failure to act could be seen as a dereliction of its duty to protect the economy and consumers from the adverse effects of rising prices. A more proactive stance is necessary to ensure that inflation remains within manageable levels and does not undermine economic stability.