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India's RBI Minutes Reveal Wait-and-Watch on Rates as Oil, Food Risks Loom
The RBI kept rates on hold at 6.5% in April, minutes show, citing food and oil inflation uncertainty. The rupee and bonds saw limited reaction as markets await April CPI data on May 13.
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India's rate-setting committee kept the repo rate at 6.5% during its April review, minutes released Friday showed, opting to wait for clearer signals on whether higher oil and food prices would lead to broader inflation. The panel's cautious stance reflects a central bank focused on anchoring price expectations while growth remains below potential.
Several members pointed to food inflation as the dominant near-term risk. Cereal and pulse prices have stayed elevated, and while vegetable inflation has eased from summer peaks, the stickiness in staples keeps headline pressure alive. On the energy side, crude oil above $90 a barrel could add 15-20 basis points to the inflation reading and widen the current account deficit, the minutes noted. The RBI's own staff models project headline inflation averaging 5.2% in the current quarter, with a decline to 4.0% in the second half of the fiscal year – but that path depends heavily on monsoon outcomes and global crude trajectories.