RBI guv Sanjay Malhotra to deliver Monetary Policy Statement today:Top bank likely to keep repo rate unchanged amid rising inflation

The Reserve Bank of India (RBI), governor, Sanjay Malhotra is all set to deliver Monetary Policy Committee (MPC) statement regarding decisions taken during the June 2026 meet on Friday at 10 am. According to most of the analysts, the apex bank is expected to maintain the status quo on the repo rate in the wake of rising inflation in the country. Latest Inflation Projections of RBI: Repo rate stands at 3 years 10-month low With RBI maintaining status quo on the benchmark policy rate, the repo rate stands unchanged at 3 years and 8-month low of 5.25% in the country. Other key policy tools of the RBI are as follows: Repo Rate Trajectory Why does the Reserve Bank increase and decrease the repo rate? Any central bank has a powerful tool in the form of policy rate to fight inflation. When inflation is very high, the central bank tries to reduce money flow in the economy by increasing the policy rate. If the policy rate is higher, the loans that banks receive from the central bank will be expensive. In turn, banks make loans expensive for their customers. This reduces money flow in the economy. When money flow decreases, demand falls and inflation comes down. Similarly, when the economy goes through a bad phase, there is a need to increase money flow for recovery. In such cases, the central bank reduces the policy rate. This makes loans from the central bank to banks cheaper and customers also get loans at cheaper rates. What experts say? The central bank is likely to maintain the status quo on interest rates in its monetary policy announcement on Friday as the impact of the ongoing crisis in West Asia on economic growth remains difficult to assess, said, Bank of Baroda in a report, according to the news agency, ANI. We may expect status quo on rates as the impact on growth due to the crisis is still difficult to ascertain, and on the inflation front, an increasing trend is imminent. -Bank of Baroda According to PTI, Gaura Sen Gupta, Chief Economist at IDFC First Bank expects the RBI to stay on pause as inflation remains within the inflation-targeting band. The RBI factors in the Consumer Price Index (CPI) when formulating its monetary policy. The government has set the CPI based headline inflation target at 4% with the upper tolerance level of 6% and the lower tolerance level of 2% for the central bank.
The CPI or retail inflation rose slightly to 3.48% in April, mainly due to higher prices of gold and silver jewellery as well as some kitchen items Abhishek Bisen, Head-Fixed Income, Kotak Mahindra AMC, said that the meeting comes amid heightened uncertainty due to global conflicts, rising crude prices, sharp rupee depreciation, and monsoon risks. Against this backdrop, while markets are pricing in potential rate hikes ahead, the RBI is likely to hold the repo rate at 5.25 per cent for now but adopt a more hawkish toneraising inflation forecasts, slightly trimming growth projections, and relying on forex tools to manage currency volatility. -Abhishek Bisen, Head-Fixed Income, Kotak Mahindra AMC RBI’s MPC holds meet every two months The committee has 6 members. Out of these, 3 are from RBI, while the rest are appointed by the central government. RBI’s meeting happens every two months. The three RBI officials are Sanjay Malhotra (Governor), Poonam Gupta (Deputy Governor), Rajiv Ranjan (Executive Director). While, the three external members are Nagesh Kumar (Director and Chief Executive, Institute for Studies in Industrial Development, New Delhi), Saugata Bhattacharya (Economist) and Ram Singh (Director, Delhi School of Economics).