Business
05 Apr, 2026
Economists see RBI holding rates in April policy review on inflation fears amid West Asia crisis
Business To Business, Mumbai, 05 April 2026: The Reserve Bank of India is widely expected to keep the benchmark repo rate unchanged at 5.25% in its April monetary policy review, according to economists.
Economists point to growing uncertainties that complicate the policy outlook:
- West Asia tensions are pushing up crude oil prices, increasing inflation risks
- Commodity price volatility is adding to cost pressures
- The Indian rupee hitting record lows is making imports more expensive, further fueling inflation
Aditi Nayar noted that with uncertainty around crude prices and geopolitical developments, the RBI is expected to
stay on hold and monitor inflation trends closely before making any moves.
- Inflation trajectory, especially fuel and imported inflation
- Economic growth outlook
- Currency stability and external sector pressures
A rate pause suggests the RBI is trying to
balance inflation control with growth support. Raising rates could curb inflation but hurt growth, while cutting rates now could worsen price pressures.
In short, the central bank is likely to adopt a
wait-and-watch approach, keeping policy steady until there is clearer direction on inflation and global conditions.