Policy meet: RBI likely to maintain status quo on rates, adopt cautious approach amid West Asia crisis

Business To Business, Mumbai, 31^st May, 2026:   Economists and market experts broadly expect the Reserve Bank of India (RBI) to keep the repo rate unchanged at 5.25% at its upcoming monetary policy meeting, while adopting a more cautious tone because of growing global uncertainties.
What is expected?
The RBI's six-member Monetary Policy Committee (MPC), chaired by Sanjay Malhotra, is meeting from June 3 to June 5, with the policy decision scheduled to be announced on June 5.
Most analysts expect:

• Repo rate to remain at 5.25%.
• A cautious policy stance reflecting external risks.
• Possible revisions to inflation and growth projections.

1. West Asia tensions
   • Geopolitical instability has pushed up crude oil and energy prices.
   • Higher oil prices can increase transportation and production costs across the economy.
2. Supply-chain disruptions
   • Global trade and shipping routes remain vulnerable to disruptions.
   • Delays and higher freight costs can feed into inflation.
3. Rupee depreciation
   • A weaker rupee makes imports more expensive.
   • This can raise costs for fuel, electronics, industrial inputs and other imported goods.

• Raise its inflation forecast if energy prices remain elevated.
• Lower its GDP growth estimate if global uncertainties begin affecting investment, exports and consumption.

• India's domestic economy remains relatively resilient.
• Inflation has moderated compared with previous peaks.
• However, external shocks from geopolitical tensions and commodity markets could reignite price pressures.