RBI MPC Meet: Will The Central Bank Hold Rates? Here’s What Analysts Say

RBI MPC Meet: The Reserve Bank of India (RBI) is widely expected to keep policy rates unchanged when it announces its Monetary Policy Committee (MPC) decision on April 8, in what will be the first policy review of FY27 and the first since tensions escalated in West Asia.

The analysts Outlook Money spoke to largely expect the central bank to maintain status quo, however, they say commentary on growth, inflation and liquidity will be important to track, as these will help in defining the mood of the market for the months ahead.

RBI Likely To Stay On Hold

Most economists expect the RBI to keep the repo rate unchanged at 5.25 per cent. The RBI had earlier cut rates by 125 basis points since February 2025, in an aggressive easing cycle.

Rajani Sinha, chief economist at CareEdge Ratings, said, "We expect the RBI to maintain status quo on policy rates and stance in its upcoming meeting." She added that amid global volatility, the central bank is likely to adopt a “wait and watch” approach to retain flexibility.

Vinayak Magotra, product head and founding team at Centricity WealthTech also expects the RBI to keep policy rates unchanged, as current inflationary pressures remain “largely supply-driven”, and the full impact of recent global developments is “yet to reflect” in domestic data.

Akshat Garg of Choice Wealth, mirroring a similar view, said the central bank would prefer to wait for clearer data before taking any directional call.

War, Oil Prices Cloud Policy Outlook

The macroeconomic scenario has changed significantly since the February policy, particularly due to US-Iran war and rising oil prices.

Radhika Rao, senior economist and executive director at DBS pointed out that external risks have intensified despite some easing in tariff concerns. Financial markets have also shown signs of stress, including rising bond yields and currency pressures.

She noted that the current environment resembles a stagflationary shock driven by external factors, making monetary policy less effective in addressing near-term inflation.

Inflation Still Under Control, For Now

Despite rising concerns, analysts believe inflation is not yet at alarming levels.

Rao highlighted that inflation in FY26 averaged around 2.0–2.2 per cent, providing some cushion against potential fuel-driven price pressures in FY27. This gives the RBI room to pause, as the risk of breaching the upper tolerance band of 6 per cent remains limited for now.

However, the outlook is not entirely comfortable. Analysts will closely track food and fuel prices for any signs of second-round effects spilling into broader inflation.

RBI May Hold Now, But Not Done Yet

While the immediate outlook suggests a status quo, some experts see the possibility of rate hikes later in the year.

Magotra of Centricity WealthTech saidthat a rate hike could be on the table if inflation remains elevated and begins to spread across the economy. “We expect one rate hike over the course of the year if inflation remains elevated over the next few quarters, particularly on the back of food and fuel, and begins to feed into broader price pressures, prompting the RBI to anchor expectations,” he said.

RBI’s Eye On Rupee, Liquidity

Apart from rate decisions, the RBI’s handling of rupee volatility will be in focus.

According to CareEdge Ratings’ Sinha, the central bank may explore additional measures, including attracting foreign currency inflows through NRI deposits or tightening outward remittances.

Magotra said the RBI is likely to continue calibrated intervention in forex markets to manage volatility rather than defend any specific exchange rate level.

RBI MPC Meet: What Else To Watch

The policy outcome itself may not be enough to make any significant impact on markets, as most of the anticipation is largely priced in. However, analysts say that the RBI’s commentary will be important to watch.

Magotra said investors will closely watch for any revision in gross domestic product (GDP) growth and inflation projections, and signals on liquidity management and future rate actions.

Rao added that the central bank is likely to avoid a clearly hawkish tone.

As Rao summed up, the policy outlook is shifting from a “benign inflation–strong growth” phase to a more cautious balancing act, where the central bank must manage inflation pressures without derailing growth.