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RBI MPC Meet Begins: Status Quo on Rates Likely Amid West Asia Tensions

The RBI's Monetary Policy Committee meeting has begun, with analysts widely expecting the central bank to maintain the current repo rate. The meeting occurs amid heightened uncertainty due to the West Asia conflict and elevated crude oil prices, which are clouding the inflation outlook. Experts state the focus will be on the RBI's commentary regarding inflation, growth projections, and future policy trajectory. Tools like 'Operation Twist' may be explored to manage financial market stability and external sector pressures.

Key Points: RBI MPC Meet: Status Quo on Rates Expected

  • Status quo on repo rate expected
  • Inflation outlook clouded by oil prices
  • Focus on RBI's growth & inflation projections
  • External sector & rupee stability key concerns
3 min read

RBI MPC meet begins, status quo on policy rate likely amid West Asia tensions

RBI's MPC meeting begins with analysts expecting rates to stay unchanged. Focus shifts to inflation outlook, growth projections, and commentary amid global tensions.

"We do not expect any immediate liquidity or currency management measures, as the RBI has been acting as and when required. - Madan Sabnavis"

New Delhi, April 6

The Reserve Bank of India's three-day Monetary Policy Committee meeting began on Monday, with analysts widely expecting the central bank to keep the repo rate unchanged amid heightened uncertainty due to the West Asia conflict.

The meeting -- scheduled from April 6 to April 8 -- comes at a time when rising crude oil prices and global geopolitical tensions have clouded the inflation outlook.

While the RBI is likely to maintain the status quo in the upcoming policy, experts said the central bank's commentary on inflation, growth and future rate trajectory will be closely watched.

"We do not expect any immediate liquidity or currency management measures, as the RBI has been acting as and when required," said Madan Sabnavis, Chief Economist at Bank of Baroda.

Analysts noted that the focus will be on the RBI's revised GDP growth and inflation projections, especially as Brent crude hovered around $100 per barrel in March due to the ongoing energy shock.

Some experts cautioned that while the rate cut cycle appears to have ended, the possibility of a rate hike later in the fiscal year cannot be ruled out if inflation breaches the upper tolerance band of 6 per cent.

According to HSBC Global Investment Research, the policy will be largely about communication to address concerns arising from the oil price surge. Despite the current shock, the investment bank's economists said they do not expect rate hikes in the near term, as the RBI is likely to focus on the one-year ahead inflation trajectory, which may remain relatively benign.

Meanwhile, a report by SBI Research said the central bank may need to explore tools such as "Operation Twist" to manage yields and maintain stability in financial markets, while also addressing external sector pressures.

"India is not insulated from the current crisis, with the rupee weakening and crude oil prices staying elevated, leading to imported inflation pressures," said Soumya Kanti Ghosh, Group Chief Economic Adviser at State Bank of India.

He added that liquidity conditions may need to be carefully managed to support the rupee amid ongoing volatility.

The central bank has been active on the liquidity front in recent months, conducting Open Market Operations (OMO) purchases of government securities and Variable Rate Repo (VRR) auctions to inject rupees into the banking system.

The RBI cut rates by a cumulative 25 basis points to 5.25 per cent in December 2025, a stimulus that most economists now believe has run its course.

- IANS

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Reader Comments

P
Priya S
As a small business owner, I'm relieved they're likely keeping rates steady. Another hike would have made loans impossible. But the imported inflation from high oil prices is a real worry for our input costs. 😓
R
Rohit P
The commentary is more important than the decision itself. We need clear communication from the Governor on how they plan to tackle inflation if oil stays above $90. The common man is already feeling the pinch.
S
Sarah B
Watching from an investment perspective. The mention of 'Operation Twist' by SBI Research is interesting. Managing bond yields is crucial for market stability. Hope the MPC's tone remains non-hawkish.
V
Vikram M
With elections around the corner, a status quo was expected. But let's be honest, the real test is managing inflation without hurting growth. The West Asia crisis shows how vulnerable we are to external shocks.
K
Karthik V
Respectfully, I think the RBI has been a bit too passive on liquidity management recently. As Ghosh from SBI said, careful management is needed. Proactive steps, not just reactive ones, would inspire more confidence.
M
Meera T
The focus on one-year ahead inflation is sensible. We can't panic over temporary oil spikes. Long-term stability for home loan EMIs is what matters to

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