Central Bank Maintains Repo Rate Amid Middle East Conflict Impact The Reserve Bank of India (RBI) has decided to keep the repo rate unchanged at 5.25% for the second consecutive meeting, as the central bank’s monetary policy committee convened in Mumbai. The decision comes amid ongoing tensions in the Middle East, which have disrupted global supply chains and raised concerns about India’s economic stability. The committee emphasized the need to balance inflation control with supporting domestic growth, citing the dual pressures of rising energy costs and geopolitical uncertainties. Inflation remains a key concern, with the country’s average inflation rate for the past fiscal year recorded at 4%—below the central bank’s target range. However, analysts warn that the Middle East conflict could drive up prices for energy and commodities, potentially pushing inflation higher in the coming months. While food prices have remained relatively stable due to favorable harvests, the impact of rising fuel and industrial commodity costs could offset this trend. The RBI highlighted that the rupee’s depreciation against the U.S. dollar, which reached a 12-month low, has added to inflationary pressures, though domestic economic fundamentals remain strong. The central bank’s measures to stabilize the financial markets include temporary interventions to address excess volatility, though these are not expected to be long-term. The RBI noted that the current low-interest rate environment, which saw a 1.25% reduction in lending rates last year, has already eased borrowing costs for households and businesses. However, the bank warned that sustained low rates could pose risks to inflation if global commodity prices remain volatile.#middle_east #mumbai #reserve_bank_of_india #monetary_policy_committee #investment_portfolio_liquidity_facility
RBI MPC Meeting Amid US-Iran War: Repo Rate Decision to Impact Loan EMIs The Reserve Bank of India (RBI) is set to hold its Monetary Policy Committee (MPC) meeting on Wednesday, April 8, 2026, amid escalating tensions from the ongoing conflict between the United States, Israel, and Iran. The meeting will focus on global economic instability, surging crude oil prices, inflationary pressures, and the potential impact of the war on India’s financial markets. A key outcome of the meeting will be the decision on the repo rate, which directly affects the Equated Monthly Installments (EMIs) for home and auto loans. The decision comes against a backdrop of heightened global uncertainty. The war has disrupted the Strait of Hormuz, a critical oil transit route, exacerbating the energy crisis and driving up oil prices. This has raised concerns about inflation and economic growth in India and other nations. The RBI’s MPC will assess how these developments influence monetary policy and the broader economy. The RBI’s governor, Sanjay Malhotra, will lead the six-member committee, which is addressing the fiscal challenges of FY2026-27. The meeting follows a period of rate cuts in the previous year, during which the repo rate was reduced by 125 basis points. However, in February 2026, the central bank paused further cuts, maintaining the rate at 5.25%. Economists are currently predicting that the repo rate will remain unchanged, as the RBI prioritizes stabilizing financial markets and supporting the rupee amid global volatility. The decision to keep the repo rate steady would mean no immediate impact on loan EMIs for borrowers. However, the RBI’s focus on liquidity management and currency support is expected to influence long-term interest rates.#reserve_bank_of_india #sanjay_malhotra #monetary_policy_committee #hsbc_chief_economist #pankaj_bhadani
