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2026-04-08 13:09:18
[RBI Keeps Interest Rates Unchanged to Address Dual Pressures of Rupee Depreciation and Growth] (1) At its first policy meeting since the outbreak of the Middle East crisis, the Reserve Bank of India (RBI) unanimously voted to keep the benchmark repo rate unchanged at 5.25%, maintaining a neutral monetary policy stance, in line with all economists' expectations. (2) Tensions between Iran and the United States are putting pressure on India's energy supply and growth prospects. India relies on the Middle East for about half of its crude oil and most of its kitchen gas, and the impact of the Strait of Hormuz blockade is particularly pronounced. The continued depreciation of the rupee (which has fallen by about 7% over the past year, making it one of the worst-performing currencies in Asia) is the central bank's current biggest concern. (3) Although the central bank has taken proactive measures to curb speculative bets against the rupee, economists say that the continued surge in energy prices may eventually force the central bank to raise interest rates. The central bank governor said he would carefully control excessive exchange rate volatility while trying to support economic growth.
