RBI Likely To Maintain Status Quo In Upcoming Monetary Policy: SBI Research

The Reserve Bank of India is expected to keep policy rates unchanged at its upcoming monetary policy meeting, according to SBI Research, which says the current mix of global uncertainty, evolving inflation dynamics and domestic liquidity conditions warrants a pause.

In its pre-policy note, SBI Research said, “RBI is thus likely to maintain status quo in the upcoming policy.” The assessment comes at a time when the global environment remains unsettled. The report notes that the “rapid pace and unhinged intensity of unfolding events make the landscape near opaque,” raising questions over the effectiveness of policy actions across economies.

A key factor shaping the outlook is rising geo-economic stress. SBI Research pointed out that its in-house stress index shows that “heightened uncertainty leads to economic stress with a lag of 3-4 months.” This means that global tensions and recent policy shifts could continue to weigh on economic conditions in the months ahead.

On the inflation front, the report flags that changes in the consumer price index (CPI) series could nudge headline numbers slightly higher. According to SBI Research, “overall CPI will increase marginally by 20-30 bps,” when recalculated with new weights, although months with higher food inflation could see the new series print lower by a similar margin.

Liquidity, however, is not a constraint at the moment. The banking system has moved back into surplus mode, with SBI Research noting that “system liquidity turned to surplus mode on 31st Dec 2025.” Despite this, bond yields have not softened in line with policy easing. The report observes, “despite policy rate easing, government bond yields have exhibited persistent hardening in recent periods.”

Currency movements are another variable in play. The rupee has been volatile, says SBI Research. It noted that the rupee “saw-sawed between 89-92 per dollar for the past two months.” While the India-US trade deal has offered some support, the report further adds, it says that forward market signals still point to depreciation pressures.

With global growth moderating, inflation dynamics shifting and financial market signals mixed, SBI Research believes the central bank will prefer continuity over change for now. A pause, in this context, is seen less as inaction and more as a calibrated step while policymakers assess how global and domestic forces evolve in the coming months.