RBI MPC Meeting Starts Today, Repo Rate Decision On Wednesday: What To Expect?

Last Updated:April 06, 2026, 07:56 IST

The RBI MPC is expected to keep the repo rate unchanged at 5.25% on Wednesday, as escalating geopolitical tensions and rising crude oil prices complicate the inflation outlook.

RBI MPC Meeting This Week.

RBI MPC Meeting April 2026: The six-member Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) will begin its crucial April policy meeting on Monday, with the outcome scheduled for Wednesday. According to a majority of economists, the MPC is expected to keep the benchmark repo rate unchanged at 5.25 per cent, as escalating geopolitical tensions and rising crude oil prices complicate the inflation outlook.

West Asia Crisis Clouds Inflation Trajectory

The ongoing tensions in West Asia have emerged as a key concern for policymakers, pushing crude oil prices above $100 per barrel and triggering fears of imported inflation.

A weaker rupee, hovering near record lows, has added to the pressure, raising input costs across sectors and increasing the risk of second-round effects on core inflation.

Economists estimate that every $10 per barrel increase in crude oil prices could lift inflation by up to 60 basis points, making the current price trajectory a significant risk factor.

RBI Likely To Stay Cautious Despite Cooling Inflation

While retail inflation has moved closer to the RBI’s medium-term target of 4 per cent in recent months, the central bank is unlikely to take comfort from the trend given the evolving global risks.

Aditi Nayar, chief economist at ICRA, said the RBI is expected to remain on pause and assess incoming data before considering further action.

Echoing similar views, several economists said the central bank would prefer to “look through” the current supply-side shocks rather than respond prematurely with policy changes.

Dipti Deshpande, principal economist, Crisil, said under the base case expectation that inflation stays close to the MPC’s target, the monetary policy may look through this supply shock and will keep rates on hold.

Rupee Weakness, El Niño Risks Add To Concerns

Currency depreciation has emerged as another key variable. The rupee has weakened sharply in recent weeks, amplifying imported inflation pressures.

Economists also flagged the risk of a potential “super El Niño’, which could disrupt food supply and add further volatility to inflation in the coming months.

“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 $100 per barrel, resulting in a jump in imported inflation across states,” Ghosh said.

Growth Outlook Stable, But Risks Emerging

Despite external headwinds, domestic growth conditions remain relatively resilient. However, economists cautioned that prolonged global uncertainty could weigh on exports and private investment.

As a result, the RBI is expected to prioritise inflation management over growth support in the near term, while retaining flexibility in its policy stance.

Focus On Guidance, Not Just Rate Decision

While a rate pause is largely priced in, market participants will closely track the RBI’s commentary on inflation, growth, and liquidity conditions.

Any revision in inflation forecasts — particularly an upward adjustment — will be a key signal for future policy direction.

Economists broadly expect the central bank to retain its ‘neutral’ stance, allowing room to respond to evolving macroeconomic conditions.

A Delicate Policy Balancing Act

The April policy comes at a time when the RBI must navigate a complex mix of easing domestic inflation and rising external risks.

With crude prices volatile, currency under pressure, and global uncertainties intensifying, the central bank is expected to adopt a watchful and cautious tone, keeping its options open in the months ahead.

The central bank has so far reduced the repo rate by 1.25 per cent since last February, as the cool down in inflation offered it the space to work towards further boosting growth. However, the central bank kept the rate unchanged in the August, October and February 2026 monetary policies.

As per estimates, every $10 increase in crude prices per barrel stokes inflation by up to 0.60 per cent. Crude prices, which were in the $60 per barrel vicinity for long, have hardened to over $100 since the start of the conflict in late February. Additionally, the rupee has depreciated by over 4 per cent since the war, which has consequences for pushing up import inflation.

“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,” state-run lender Bank of Baroda’s chief economist Madan Sabnavis said.

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