RBI’s three-day MPC meeting starts from today, inflation and economic growth will be monitored

New Delhi, June 3. The three-day meeting of the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) started from Wednesday. Experts believe that amid the ongoing tension in West Asia and global uncertainties, the central bank will not make any changes in interest rates this time. After the meeting, RBI Governor Sanjay Malhotra will announce policy decisions on Friday. The June monetary policy review is taking place at a time when geopolitical tensions persist in West Asia and volatility in global crude oil and natural gas prices.

This has made the economic scenario more complex. However, most economists believe that RBI can keep the interest rates stable this time, but in view of the global challenges, the stance of its statement may be more cautious or strict than before. According to Pranjul Bhandari, Chief India Economist of HSBC, RBI may adopt a policy of keeping interest rates stable in the near future, but there may be a possibility of some tightening over time. He said that currently the market is looking at the possibility of cutting interest rates approximately twice from the fourth quarter of 2026, and not any major level of tightening.

According to Bhandari, RBI’s revised economic estimates will be in focus, especially on how it assesses the ongoing shocks in the energy sector and whether it raises its estimate of average crude oil price from around $85 per barrel earlier. He said that if the basic estimate of oil prices increases, then the inflation estimate may also increase from the earlier 4.6 percent to around 5 percent. At the same time, according to a report by CareAge Ratings, inflation pressure has increased due to the fear of a below normal monsoon and the recent increase in retail prices of fuel. The report also said that the increase in wholesale inflation may impact retail inflation faster than expected. According to the report, at present the increase in inflation is mainly due to the supply side and not due to increase in demand.

CareAge Ratings has estimated the gross domestic product (GDP) growth rate to be 6.7 percent in the financial year 2026-27, provided the average price of crude oil remains around $ 90 per barrel. However, the report warns that if the conflict in West Asia prolongs and oil prices reach around $ 110 per barrel, then the economic growth rate may decline to around 6 percent. SBI Research also believes That in view of the persistent inflation risk and global instability, RBI will not make any change in the repo rate. The report has estimated the GDP growth rate to be 6.6 percent for the financial year 2026-27 and about 7.5 percent for the financial year 2025-26.

Also, consumer price index (CPI)-based inflation may remain above 5 percent for several quarters due to fuel price and global shocks. Apart from this, MK Global Financial Services has also predicted to maintain status quo in interest rates. The brokerage firm says that the recent softening of Brent crude prices and improvement in external economic conditions have brought relief to the RBI. According to the brokerage, if oil prices fall further and geopolitical tensions reduce, it will strengthen the rupee and can help the RBI keep the interest rates stable for a long time.