The Reserve Bank of India's Monetary Policy Committee (MPC) voted 4-2 to hold the repo rate steady at 6 percent during its April 2026 bi-monthly review. Governor Sanjay Malhotra emphasized the need for caution as global trade dynamics remain volatile.
Balancing Growth and Inflation
Consumer inflation stood at 4.3 percent in March, within the RBI's target band but trending upward due to rising food prices. Core inflation, which strips out food and fuel, remained benign at 3.1 percent, giving the committee some comfort.
"The global environment warrants a wait-and-watch approach. We remain committed to price stability while supporting growth," Malhotra said in his post-policy press conference.
Market Reaction
Bond yields dipped marginally following the announcement, while the rupee held steady against the dollar at 84.2. Equity markets showed a muted response, with the Sensex closing flat as the decision had been priced in by most analysts.
- GDP growth projection maintained at 6.7% for FY27
- Inflation forecast revised upward to 4.5% from 4.2%
- Liquidity conditions described as "broadly adequate"
Two external members dissented, arguing for a 25-basis-point cut to stimulate private investment. Economists remain divided on whether the RBI will ease rates in June, with futures markets pricing in a roughly 40 percent probability of a cut.
