03 April,2026 11:57 AM IST | Mumbai | mid-day online correspondent
Reserve Bank of India. File Pic
Economists have indicated that the Reserve Bank of India (RBI) is unlikely to change the repo rate or its policy stance in its upcoming monetary policy committee (MPC) meeting, which is scheduled from April 6 to April 8. The cautious approach comes in the wake of ongoing geopolitical tensions and rising crude oil prices, which have affected global economic stability as reported by IANS.
According to experts, the RBI will maintain the current repo rate, and no immediate steps are expected to manage liquidity or the currency. Madan Sabnavis, Chief Economist at Bank of Baroda, said, "We do not expect any measures for either liquidity or currency management as RBI will act whenever required, as we have seen of late."
The central bank's priority, economists say, will be to carefully assess the impact of the West Asia conflict and the resulting energy price shock, with Brent crude averaging around USD 100 per barrel in March.
While no rate action is anticipated, all eyes will be on the RBI's forecast for GDP growth and inflation. If inflation exceeds the upper tolerance band of 6 per cent, a rate hike could be considered later in the year.
HSBC Global Investment Research notes that the upcoming meeting will primarily serve as a communication exercise to address market concerns about the rising oil prices. "We expect the RBI to outline scenarios, sensitivities, and broad tenets of their reaction function," the HSBC economists said, reported the news agency.
They added that despite the oil price shock, a rate hike is unlikely in the near term, as the RBI will focus on one-year ahead inflation projections, which may appear softer than the immediate monthly readings.
Experts believe the Indian economy has reached the end of the rate cut cycle, and the RBI will now remain on a prolonged pause. The recent decision on March 27 to tighten onshore banks' net open foreign exchange positions sparked speculation about a potential interest rate move to defend the rupee, but economists have clarified that the bar for a rate hike remains high.
The central bank is expected to continue its cautious stance, prioritizing economic stability, inflation management, and measured responses over immediate interventions. The policy announcement will be closely watched by investors, businesses, and households, as it will provide clarity on how India plans to navigate the uncertain global environment.
(With IANS Inputs)
