RBI Expected to Hold Repo Rate at 5.25% Amid Inflation Risks

The Reserve Bank of India (RBI) is widely expected to maintain its benchmark repo rate at 5.25% during the upcoming April monetary policy review. Economists and market analysts point to persistent inflation risks, exacerbated by the ongoing crisis in the Middle East, as the primary driver for the central bank’s cautious stance.

While domestic growth remains a priority, the volatility in global energy markets and supply chain disruptions originating from regional instability in the Middle East have complicated the inflation outlook. By holding rates steady, the RBI aims to balance the need for economic expansion while ensuring that price pressures remain contained within its target range. The central bank has consistently emphasized its commitment to the 'withdrawal of accommodation' stance to align inflation with its medium-term mandate. Market participants are now looking toward the upcoming policy statement for further guidance on the central bank's assessment of global headwinds and its projected path for liquidity management in the coming fiscal quarter.