'Global Economy Hostage To West Asia Developments': RBI Governor's Warning On Renewed Risks
Newsbusinesseconomy'Global Economy Hostage To West Asia Developments': RBI Governor's Warning On Renewed RisksLast Updated:August 05, 2026, 10:45 ISTThe RBI Governor said supply-side pressures caused by the. . .
Newsbusinesseconomy'Global Economy Hostage To West Asia Developments': RBI Governor's Warning On Renewed RisksLast Updated:August 05, 2026, 10:45 ISTThe RBI Governor said supply-side pressures caused by the conflict had eased somewhat since June 2026 but renewed tensions since the first week of July have increased uncertainty. Smoke rises from a port near the Strait of Hormuz, following a US strike in Kuhestak, Iran. (Reuters file image)The Reserve Bank of India (RBI) warned that the ongoing conflict in West Asia continues to pose risks to the global economy, with Governor Sanjay Malhotra highlighting disruptions to key trade routes, volatility in energy prices and uncertainty around global supply chains. “The West Asia conflict continues to challenge global economy by disrupting key trade routes," Governor Malhotra said while announcing the Monetary Policy Committee’s (MPC) decision. Recommended StoriesRepo Rate, GDP, Inflation: 5 Biggest Takeaways From Today's RBI Monetary PolicyRBI Cuts FY27 Inflation Forecast To 5%: What Governor Sanjay Malhotra Said On West Asia, El Nino RisksWord Of The Day: Repo Rate Meaning, RBI Impact On EMI, Loans And SavingsRBI Revises FY27 GDP Growth Forecast Up To 6. 7%; Sees Indian Economy Staying ResilientRead more:RBI Revises FY27 GDP Growth Forecast Up To 6. 7%; Sees Indian Economy Staying ResilientThe RBI Governor said supply-side pressures caused by the conflict had eased somewhat since June 2026 but renewed tensions since the first week of July have increased uncertainty. “However, the re-escalation of the conflict since the first week of July has amplified volatility in energy prices and renewed uncertainty about supply chains," Governor Malhotra said. He added that global economic conditions and market sentiment remain closely linked to developments in the region, with rapidly changing events in West Asia continuing to influence the outlook. Read more:RBI Cuts FY27 Inflation Forecast To 5%: What Governor Sanjay Malhotra Said On West Asia, El Nino Risks“The global economic conditions and sentiments continue to remain hostage to the rapidly oscillating developments in West Asia," the Governor said, adding that the central bank would continue to implement measures to strengthen the resilience of the Indian economy. The remarks came as the RBI’s Monetary Policy Committee unanimously decided to keep the policy repo rate unchanged at 5. 25 per cent while retaining its neutral stance. The central bank has been closely monitoring the impact of geopolitical tensions, particularly through their effect on crude oil prices, inflation and external sector risks. India, as a major importer of crude oil, remains sensitive to sharp movements in global energy prices. Read more:Repo Rate, GDP, Inflation: 5 Biggest Takeaways From Today’s RBI Monetary PolicyGovernor Malhotra also said that the rise in inflation in June was primarily driven by higher food and fuel prices, while broader inflationary pressures remained contained. “The increase in inflation in June was primarily due to higher food, fuel, and fuel-induced inflation," he said. The RBI’s latest policy decision reflects its cautious approach as it balances domestic growth momentum with risks emerging from global conflicts, commodity price volatility and uncertain supply conditions. News18 NewsletterHandpicked stories, in your inboxA newsletter with the best of our journalismLocation :Delhi, India, IndiaFirst Published:August 05, 2026, 10:45 ISTDisclaimer: Comments reflect users’ views, not News18’s. Please keep discussions respectful and constructive. Abusive, defamatory, or illegal comments will be removed. News18 may disable any comment at its discretion. By posting, you agree to ourTerms of UseandPrivacy Policy. Loading comments. . . Read More