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The Reserve Bank of India Governor Sanjay Malhotra-led Monetary Policy Committee unanimously decided to keep the repo rate unchanged at 5.25%.
All 33 economists tracked by Bloomberg anticipate no change in the benchmark rate, pointing to a broad consensus that the Monetary Policy Committee will extend its pause while assessing evolving global and domestic conditions.
The meeting, scheduled from April 6 to 8, is the first of the new financial year and comes against a markedly different backdrop from February, after tensions in the Middle East disrupted oil supply routes and pushed up crude prices.
Since February last year, the RBI has cut interest rates by a total of 125 basis points, with the last rate cut reported in December 2025.
Watch RBI Governor Sanjay Malhotra's Speech Live:
Rupee has depreciated over the last year, Governor Sanjay Malhotra said. He reiterated the central bank's policy of intervention in FX market only to manage volatility and not target any price level.
The RBI recently enforced stricter regulations to limit speculative activities by setting a ceiling of $100 million on banks' net open positions, imposing limitations on non-deliverable forwards (NDFs), and prohibiting the rebooking of contracts that have been cancelled.
The RBI has revised FY26 growth downward to 7.3% vs 7.6% estimated earlier.
"The real GDP growth for last year is estimated at 7.6%. This corroborates the underlying strong momentum in economic activity supported by robust consumption and investment amidst supportive policy measures, ongoing structural reforms and favourable financial conditions. Going forward, elevated energy and other commodity prices as also shocks to the availability of inputs due to disruptions in the Strait of Hormuz, are likely to impact growth this year. The government has been proactive in ensuring the supply of inputs across critical sectors to minimise the impact of supply chain disruptions. On the other hand, sustained momentum in the services sector, the persisting impact of GST rationalisation which was carried out last year and the healthy balance sheets of financial institutions and corporates should continue to support economic activity."
Governor Sanjay Malhotra said the West Asia conflict will impact India's GDP growth this year even as fundamentals remain strong. The MPC opined intensity and duration of conflict and it’s damage to infrastructure is a risk to inflation and growth outlook.
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RBI MPC members see upside risks to headline CPI, said Governor Sanjay Malhotra.
As expected, Reserve Bank of India Governor Sanjay Malhotra-led Monetary Policy Committee unanimously decided to keep the repo rate unchanged at 5.25%. The 'neutral' stance has been retained.
RBI Governor Sanjay Malhotra said India's economy is better prepared than last time to deal with global challenges. "Our fundamentals are strong".
RBI Governor Sanjay Malhotra is set to deliver his speech, announcing the decision of the Monetary Policy Committee.
Realty stocks traded higher ahead of the MPC decision. The RBI is expected to hold interest rates steady at a four-year low of 5.25%.
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Despite a cumulative 125-basis-point reduction in the repo rate since February 2025, economists say the transmission of policy easing remains incomplete.
Recent market developments — including currency pressures, elevated funding costs and tighter financial conditions — have offset some of the intended impact of earlier rate cuts.
Economists expect the RBI to focus on maintaining liquidity and ensuring orderly market conditions rather than adjusting rates in the near term.
The April policy will also mark the central bank's first full set of projections for FY27 after it deferred annual forecasts in February due to the transition to new CPI and GDP series.
A gauge of bank stocks rose during early trade amid a broader rally on Dalal Street, The Nifty Bank index gained as much as 4.8%. The movement comes ahead of the RBI MPC decision which is expected to keep interest rates unchanged at 5.25%.
AU Small Finance Bank, Axis Bank and HDFC Bank were the top gainers on the index.
India's benchmark equity indices Nifty and Sensex surged over 3% at open after a two-week truce between the US and Iran eased market anxiety over the Gulf conflict. Lower oil prices also helped.
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The yield on the benchmark 10-year bond opened 8 basis points lower at 6.96%.
The rupee opened 35 paise stronger at 92.65 against the US dollar, ahead of the RBI MPC rate decision.
Economic activity continues to expand, but the pace of growth has eased in recent months, particularly in high-frequency indicators.
Manufacturing activity slowed in March, with the PMI falling to 53.8, its lowest level since September 2021. Services activity also moderated, with the PMI at 57.2, bringing the composite index down to 56.5. Businesses cited geopolitical tensions, volatile markets and rising costs as factors weighing on output.
At the same time, changes to the GDP base year are expected to lift headline growth estimates for FY26 to around 7.6%, compared with earlier projections, according to Bloomberg data, largely reflecting updated methodology rather than a shift in underlying momentum.
Madan Sabnavis of Bank of Baroda said the central bank is likely to stay on hold. “We do not expect any change in repo rate or stance this time. The tone will be cautious and what will be eagerly awaited is RBI's forecast of GDP and inflation under the prevailing uncertainty,” he said.
Inflation remains within the Reserve Bank's tolerance band, but recent data and global developments suggest upward pressure could build in the near term.
Consumer price inflation rose to 3.21% in February from 2.75% in January under the revised CPI series, reflecting increases in food and precious metal prices. While the level remains below the 4% target, cost pressures are beginning to strengthen.
Survey-based indicators point to rising input costs, with March PMI data showing the fastest increase in input prices in 45 months, indicating that pricing pressures are spreading across sectors. Economists expect inflation to move higher from recent lows, even if it stays broadly aligned with the target.
Barclays said the central bank is likely to remain on hold as it monitors these dynamics. “We expect the RBI MPC to keep the policy repo rate on hold and retain the neutral stance… We expect continued liquidity support and timely FX intervention to keep financial conditions stable,” the bank said.
People can livestream all the announcements made by the central bank on the official social media handles of the RBI.
Apart from this, they can even follow the real-time updates and track key highlights on YouTube and other social media channels of the NDTV Network. RBI Governor Sanjay Malhotra is expected to hold a press conference on Wednesday, April 8.
Several economic experts and analysts are expecting the RBI MPC to keep rates steady at 5.25% in its April review.
This time, the major focus remains on the central bank's comments regarding the situation in West Asia, with the US and Israel targeting Iran. The central bank is expected to stay focused on the potential inflationary impacts of the war.
Notably, the ongoing conflict has significantly disrupted global energy markets, with Brent crude prices remaining more than $100 per barrel. This comes at a time when the Strait of Hormuz faces indefinite closure, impacting India's energy imports.
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