• India’s retail inflation rose to 4.38% in June, exceeding the RBI’s 4% target for the first time in nearly 18 months.

• Higher food and fuel prices were the main drivers behind the rise in inflation.

• Renewed US-Iran tensions and disruptions around the Strait of Hormuz have increased uncertainty over global oil supplies.

• Rising crude oil prices are expected to add pressure on both inflation and economic growth.

• Despite inflation crossing the RBI’s target, most economists expect the repo rate to remain unchanged at 5.25% for now.

• Core inflation (excluding gold and silver) has risen to 2.5% and could move above 4% later this year if price pressures persist.

• The RBI’s next monetary policy decision is scheduled for August 5, 2026. Wholesale Price Inflation (WPI) climbed to nearly 10% in June, reflecting rising costs across the economy.

• Retail fuel prices remain elevated, though economists do not expect further major increases if crude oil stays around the mid-$80 per barrel range.

• An emerging El Niño and 18% below-normal monsoon rainfall have raised concerns over lower crop production and higher food inflation.

• Kharif crop sowing is 20.8% lower than the same period last year, increasing risks to agricultural output.

• Experts believe the government may use buffer food stocks if weak rainfall significantly impacts crop production.

• While inflation risks have increased, the RBI is expected to remain in a “wait-and-watch” mode unless inflationary pressures broaden further.