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Reserve Bank of India's Monetary Policy Committee to Review Interest Rates Amid Global Uncertainty

The Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) began its three-day meeting on Monday to assess economic conditions and price stability. The committee, meeting from April 6 to 8, is expected to maintain the repo rate at 5.25% in its April policy review, according to economic analysts.

The key focus of this meeting is the RBI's commentary on the ongoing US-Iran conflict and its potential impact on global and domestic inflation. The MPC will closely examine the inflationary risks emerging from the war, which has disrupted global energy markets and kept Brent crude prices above $100 per barrel since its start on February 28.

India's Energy Imports Under Pressure

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

With uncertainty around the Strait of Hormuz, India's energy imports have come under pressure, leading to a significant weakening of the rupee. The currency has depreciated by more than 4% since the conflict began, marking its worst performance in over a decade. Experts warn of further downside if crude remains elevated.

Global Interest Rate Hikes

In recent developments, central banks in countries such as Australia and Japan have raised interest rates to curb inflation, while Colombia and Brazil have also adopted similar tightening measures. Domestically, the RBI has reduced interest rates by a cumulative 125 basis points since February 2025.

CountryInterest Rate Hike (basis points)
Australia25
Japan50
Colombia100
Brazil75

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline

The RBI's future path of the rupee and interest rates will largely depend on global macroeconomic conditions, according to economists. Some economists have also warned of a potential "super El Niño" event, which could disrupt food production and add further volatility to inflation in the coming months.

RBI Expected to Maintain Cautious Stance

Economists now believe the RBI is likely to maintain a cautious stance in upcoming MPC meetings due to rapidly evolving global conditions. Even so, rates are expected to remain unchanged in the near term. ICRA chief economist Aditi Nayar stated that the RBI is expected to stay on hold and wait for more data before considering any policy changes.

Supporting this view, other economists believe the central bank may choose to "look through" temporary supply-side shocks rather than respond aggressively with policy adjustments.

When and Where to Watch RBI MPC Decision Live

The MPC statement will be released on April 8 after the conclusion of the three-day meeting. The announcement can be viewed live on the RBI's official social media channels, including YouTube. The announcement will be made at 10 am on Wednesday. Live updates and key highlights will also be available on Moneycontrol.com. Following the announcement, RBI Governor Sanjay Malhotra will address a press conference at noon.

Investor Takeaway

The RBI's monetary policy committee meeting may impact interest rates and inflation outlook.

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