Overview
- The six-member Monetary Policy Committee, which opened its review Monday and announces on Wednesday, is widely expected to keep the repo rate at 5.25% with a neutral stance.
- The RBI has already moved to curb rupee speculation by barring banks from offering rupee non-deliverable forwards and by capping end-of-day forex positions at $100 million, with compliance due by April 10.
- Brent holding above $100 and the rupee trading beyond 93 per dollar point to stronger imported inflation, and the IEA says Strait of Hormuz disruption has created a major oil supply shock.
- Analysts expect revised FY27 projections that raise inflation and lower growth, and some see tools like Operation Twist as options to cool bond yields after the 10-year benchmark crossed 7%.
- Borrowers are likely to see EMIs stay flat for now if rates are unchanged, though higher fuel and transport costs could squeeze budgets, and sustained capital outflows may keep pressure on the rupee and India’s external balances.