RBI MPC Member Says Chances of Repo Rate Hike Are Negligible

Saugata Bhattacharya, external member of the Reserve Bank of India’s Monetary Policy Committee, has said in an interview to PTI that the likelihood of a benchmark interest rate increase remains negligible in the near term. His comments come amid rising inflationary risks driven by geopolitical tensions, elevated crude oil, and higher metals prices.

Bhattacharya noted that consumer price inflation will face multiple pressures, although underlying inflation is expected to remain moderate. The remarks follow the MPC’s unanimous decision to keep the repo rate unchanged at 5.25% earlier this month.

Assessment Of Inflation Risks and Economic Conditions

Bhattacharya highlighted that inflation risks stem from weather‑related uncertainties, rising commodity prices, and heightened geopolitical tensions. He said that these factors would weigh on consumer price inflation in the coming months.

The RBI member explained that pressures from crude oil and metals require close monitoring, given their influence on both input costs and household inflation. Despite these risks, he reiterated that the economy shows no signs of overheating even after multiple stimulus measures.

Repo Rate Outlook and MPC Voting Decision

In the interview, Bhattacharya said he sees the need to raise the repo rate as negligible in the near term. Earlier this month, the MPC voted unanimously to maintain the benchmark rate at 5.25%.

The central bank also retained its neutral policy stance, indicating that interest rates are expected to remain steady for some time. Bhattacharya emphasised that current conditions do not warrant a rate increase, aligning with the committee’s recent decisions.

Recent Monetary Policy Actions and Rate Cycle Context

The RBI has reduced the repo rate by a cumulative 125 basis points since February 2025. This marks the most aggressive easing cycle undertaken by the central bank since 2019.

The most recent reduction was a 25 basis point cut announced during the December 2025 policy meeting. The RBI held rates steady in its August, October, and February 2026 policy reviews as it assessed the impact of earlier rate cuts on economic activity and inflation trends.

Inflation Projections for H1 FY27 And Contributing Factors

Bhattacharya said that CPI inflation in H1 FY27 is expected to move closer to the RBI’s 4% target. He attributed the projected rise partly to base effects, as falling headline and vegetable inflation in FY26 will reverse in the upcoming period.

He also pointed to the impact of higher precious metals prices on inflation readings. Excluding these influences, he said, underlying inflation is likely to remain benign.

Read More: RBI Expands Inflation Monitoring.

Conclusion

The remarks from MPC member Saugata Bhattacharya indicate that the central bank is expected to maintain its current policy stance despite emerging inflation risks. Although commodity prices and geopolitical factors remain key concerns, the probability of a rate hike appears limited in the near term.

The RBI will continue monitoring inflation dynamics as the impact of earlier rate cuts flows through the economy. The outlook for H1 FY27 suggests inflation may align with the central bank’s target as base effects and commodity‑linked pressures evolve.

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