New Delhi, June 5, 2026
The Reserve Bank of India is set to announce its monetary policy decision on Friday after the three-day Monetary Policy Committee meeting — chaired by Governor Sanjay Malhotra — with experts widely expecting the repo rate to remain unchanged amid geopolitical tensions and rising crude oil prices.
The policy decision comes against the backdrop of escalating geopolitical tensions in West Asia, which have pushed up crude oil prices.
Experts largely anticipate a status quo on rates, though they expect the central bank to retain a cautious tone in its forward guidance as global uncertainties continue to weigh on India’s macroeconomic outlook.
Economists broadly expect the central bank to remain in a holding pattern in the near term.
According to HSBC chief India economist Pranjul Bhandari, while the RBI is likely to maintain status quo on rates, a gradual tightening bias could emerge over time.
She noted that markets are currently pricing in around two rate cuts beginning in the fourth quarter of 2026, rather than an aggressive tightening cycle.
Bhandari added that the RBI’s updated projections will be closely watched for its assessment of the ongoing energy shock, particularly whether it revises its crude oil assumption upward from earlier levels of around $85 per barrel.
An analysis by CareEdge Ratings projected FY27 GDP growth at 6.7 per cent, assuming crude averages around $90 per barrel.
Similarly, SBI Research expected the RBI to maintain status quo on rates, citing a data-dependent approach amid persistent inflation risks and external volatility.
It pegs FY27 GDP growth at 6.6 per cent and FY26 growth at around 7.5 per cent, while CPI inflation could remain above 5 per cent for several quarters due to fuel price pressures and global shocks.
Meanwhile, Emkay Global Financial Services also expects no change in policy rates, citing easing crude oil prices and an improved external account outlook following recent corrections in Brent crude.
In the previous meeting in April, the MPC had kept the repo rate unchanged at 5.25 per cent while retaining a neutral policy stance.(Agency)
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