GDP Growth, Inflation Forecasts in Focus Ahead of RBI Policy Announcement

The Monetary Policy Committee of the Reserve Bank of India began its three-day meeting yesterday. The RBI will reveal their decisions on June 5, made by RBI Governor Sanjay Malhotra. According to experts, due to global uncertainties, the central bank is unlikely to alter the interest rates for now. The RBI Governor will release the results of the policy tomorrow.

This year's review takes place amid continuing geopolitical conflicts in West Asia. The rising prices of crude oil and natural gas make it difficult for policymakers to predict the economic future. Most economists agree that interest rates would remain unchanged. However, given the present global situation, the RBI statement will be more cautious than ever.

According to HSBC's Pranjul Bhandari, rates will remain stable in the near term, but tightening is possible later. The market is anticipating two rate cuts starting in the fourth quarter of 2026. Bhandari said that the RBI's revised economic projections will be closely monitored, particularly the average crude oil price forecast. Emkay Global Financial Services also forecasts a status quo on interest rates. The brokerage firm said the softening of Brent crude prices has provided some relief to the RBI.