RBI to Begin 3-Day Interest Rate Deliberations from Wednesday

The Reserve Bank of India’s rate-setting panel begins its three-day monetary policy meeting on Wednesday, with expectations of a status quo on interest rates amid easing inflation, a growth-supportive Union Budget and reduced external uncertainty following the India–US trade deal, as per PTI report. 

Policy Setting and Rate Outlook 

The 6-member Monetary Policy Committee (MPC), chaired by RBI Governor Sanjay Malhotra, will announce its decision on Friday. 

Madan Sabnavis, Chief Economist at Bank of Baroda, said, “The MPC looks likely to hold on to the repo rate and this could also be the end of the rate-cutting cycle.” He noted that government borrowing plans remain broadly similar to last year and liquidity conditions are still tight, limiting the scope for broad-based lending rate cuts by banks. 

He added that the central bank may instead rely on liquidity tools such as open market operations and forex swaps, and could also consider a CRR cut if required. 

Data Watch Before Next Move 

As per reported it is pointed to upcoming macro data releases as a reason for caution before any further rate action. ICRA Chief Economist Aditi Nayar said a pause would allow policymakers to evaluate fresh inflation and growth readings before shifting stance. 

She noted that January 2026 CPI data,based on a revised base year is due shortly, while an updated GDP series covering multiple fiscal years will follow later in the month. Together, these numbers will help refine the growth-inflation assessment used for policy decisions. 

Inflation Comfort Vs Growth Support 

Crisil Chief Economist Dharmakirti Joshi said softer inflation and fiscal restraint in the Budget create policy flexibility. 

“The Budget, too, remains non-inflationary due to fiscal restraint. Simultaneously, the economy is also doing well. Given these factors, the decision is likely to be a close call between holding or cutting rates. However, we lean towards a hold this time and the RBI may prefer to keep powder dry for future policy actions,” he said. 

Read More: RBI Asks Banks to Open on March 31 for Government Transactions! 

Conclusion 

With inflation currently contained and growth holding steady, most projections point to a rate pause, with the RBI likely to reassess conditions after the next round of inflation and GDP data. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.  

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.