RBI noted in its September monthly bulletin that the global economy is again confronted with rising energy prices, and increased volatility across various segments of the financial markets, with geopolitical tensions re-escalating in West Asia. Notwithstanding the ongoing global turbulence, the Indian economy recorded robust growth of 7.8 per cent in Q1:2026-27. The economy also demonstrated resilience through August as evident from high frequency indicators. Supported by strong export growth, the merchandise trade deficit narrowed. Headline inflation inched up to 4.8 per cent in August, driven by the food and beverages group along with a pickup in fuel and core components. System liquidity surplus surged following FCNR(B) deposit flows. A moderate current account deficit in Q1:2026-27 and strong FDI flows supported the external sector, and foreign exchange reserves reached an all time high.
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