Will RBI change key policy rates this week?
05 Apr 2026

The Reserve Bank of India (RBI) is expected to keep its key policy rates unchanged in the upcoming Monetary Policy Committee (MPC) meeting, scheduled for April 6-8.

The decision comes amid global uncertainty stemming from the ongoing West Asia conflict, a report by SBI Research has said.

This will be the first policy review since the conflict began.

West Asia conflict disrupts global energy market
Market impact

The SBI Research report highlights that the West Asia conflict has plunged the entire world into chaos, with global energy market disruptions being a major concern.

It notes that the de facto closure of the Strait of Hormuz has produced the biggest disruption to the global oil market in its history since 1973.

This has raised concerns over inflation and economic stability worldwide.

Rupee at 93 per dollar mark
Economic implications

The SBI report warns that India is not immune to the global developments.

It notes that the Indian rupee is already hovering above 93 per dollar and crude oil is adamant above $100/bbl resulting in jump in imported inflation.

The report also warns of a potential Super El Nino, which could further complicate inflation dynamics in the country.

Rising inflationary pressures in India
Inflation forecast

On the domestic front, SBI Research has flagged rising inflationary pressures.

It says that "imported inflation... is already at 5.4%... and is expected to increase considerably further."

The report warns that CPI inflation could "indicate more than 4.5% inflation for the next 3 quarters," further complicating the RBI's policy decisions in light of these economic challenges.

External sector concerns mounting
Worrying

Given the volatile backdrop, the RBI is expected to be careful in its communication.

The SBI report also flags external sector concerns such as rupee pressure and capital outflows.

It notes that FY26 witnessed "the highest FII outflows at $16.6 billion since 1991," while the balance of payments (BoP) is likely to remain in deficit in FY27, adding more complexity to India's economic landscape.