RBI Likely to Hold Rates Steady as MPC Decision Due Today
Mumbai: Reserve Bank of India Governor Sanjay Malhotra is set to announce the outcome of the Monetary Policy Committee (MPC) meeting at 10 a.m. on Friday, with economists and market participants widely expecting the central bank to keep policy rates unchanged amid global uncertainties.
The three-day MPC meeting will conclude with the policy announcement, followed by a press conference by the Governor at noon. At its previous meeting in April, the MPC had unanimously retained the repo rate at 5.25 per cent, maintaining a neutral stance. The Standing Deposit Facility (SDF) rate stood at 5 per cent, while the Marginal Standing Facility (MSF) rate remained at 5.5 per cent.
In its April review, the RBI projected India’s GDP growth at 6.9 per cent for FY27 and 7.6 per cent for FY26, while revising the retail inflation forecast for FY27 upward to 4.6 per cent. Experts believe the central bank is likely to adopt a cautious approach, balancing inflation risks driven by rising crude oil prices and currency depreciation against signs of moderating economic activity.
Economists, including Gita Gopinath, have indicated that the RBI may continue with a data-dependent strategy and remain on hold in the near term. Reports by institutions such as Bank of Baroda also suggest a status quo on rates, citing uncertainties arising from global tensions, particularly in West Asia.
Market participants will closely monitor the RBI’s commentary on inflation trends, growth outlook, currency stability, and external risks, including geopolitical developments, for signals on the future direction of monetary policy.
