RBI MPC meet begins today: Will repo rate stay at 5.25%? Here's what economists think

The Reserve Bank of India’s Monetary Policy Committee (MPC) will begin its three-day deliberations today as economists widely expect the central bank to keep the benchmark repo rate unchanged at 5.25% amid heightened global uncertainties.

The rate decision will be announced on Wednesday, April 8.

A poll of over a dozen economists indicated that persistent geopolitical tensions in West Asia, elevated crude oil prices, currency volatility and risks to inflation are likely to prompt the RBI to keep the pause for now, even as it reassesses its growth and inflation outlook.

“Given the uncertainty around crude oil prices and geopolitical developments, the RBI is likely to remain on pause in the April policy and closely monitor incoming inflation data before taking any further action,” said Aditi Nayar, Chief Economist at ICRA.

The policy review comes at a time when global crude oil prices have surged past USD 100 per barrel following the escalation of conflict in West Asia, raising concerns about imported inflation.

The rupee has also weakened sharply, hovering above 93 against the US dollar.

SBI Chief Economist Soumya Kanti Ghosh said the RBI will be careful in communicating its decision.

“India is not unscathed from the current crisis and is feeling the mercury rising. Rupee is already hovering above 93 per dollar, and crude oil is adamant above USD 100 per barrel, resulting in a jump in imported inflation across states,” he said.

Ghosh also said that a projected “super El Nino” could add to inflationary pressures.

Economists noted that while retail inflation has eased closer to the RBI’s medium-term target of 4% in recent months, the spike in crude oil prices could trigger second-round effects on fuel, transport and core inflation.

Estimates suggest that every USD 10 per barrel increase in crude oil prices can push up inflation by as much as 0.60 percentage points.

Crude prices, which had remained around USD 60 per barrel for an extended period, have risen sharply since late February.

Dipti Deshpande, Principal Economist at Crisil, said the central bank may choose to look through the current supply-side shock if inflation remains broadly aligned with its target.

Bank of Baroda Chief Economist Madan Sabnavis said no change in the policy rate or stance is expected, though the RBI’s updated projections for GDP growth and inflation will be closely tracked.

“We do not expect any change in repo rate or stance this time. The tone will be cautious, and what will be eagerly awaited is the RBI’s forecast of GDP and inflation under the prevailing uncertainty,” he said.

HDFC Bank Principal Economist Sakshi Gupta cautioned against reacting to short-term volatility, noting that the central bank would likely wait for clearer signals on the inflation trajectory before taking any policy action.

The RBI has cumulatively reduced the repo rate by 1.25 percentage points since February last year, but has kept rates unchanged in its August, October and February 2026 policy reviews.

Economists also expect the MPC to retain its current ‘neutral’ policy stance, allowing flexibility to respond to evolving inflation dynamics and global risks.

There is a possibility that the RBI may revise its inflation forecast upwards for the current financial year if elevated crude oil prices persist.

“The focus of policy is likely to tilt towards managing inflation risks rather than supporting growth in the near term,” a treasury official at a private sector bank said.