According to report released by SBI Research,Reserve Bank of India (RBI) is expected to keep current repo rate unchanged in June.
And that means no big rate cut drama for now . Report is basically saying RBI should stay cautious,use short-term rates and other tools to handle pressure on Indian rupee instead of rushing into rate changes.
The line from report is quite direct also: "Our call is along 'hold the rates' with a data-driven future dependency," . So yes,for now mood seems like wait,watch data,and then decide.
But numbers inside report are interesting . For fiscal year 2026-27,SBI report projects GDP growth rate of 6.6% . At same time,it says geopolitical uncertainties can still change these forecasts once more data comes in.
For FY26,report expects GDP growth to likely reach 7.5% . And fourth quarter of FY26 could see around 7.2% growth,which sounds decent on paper,but economy is also dealing with inflation,rupee pressure and crude oil risk at same time.
Few things standing out clearly here:
- CPI inflation may exceed 5% in next three quarters .
- Rupee is depreciating against other currencies despite strong macroeconomic fundamentals .
- Excise duties on diesel and petrol should be reduced to mitigate losses for Oil Marketing Companies (OMCs).
And tbh,rupee part feels most uncomfortable rn . Report says current state of rupee is concerning because it is seeing more depreciation compared to its counterparts,and that means RBI may need augmented intervention while keeping India's forex reserves adequate for currency market volatility.
There is also mention of need for Balance of Payments (BOP) package to stabilise currency . That itself shows pressure is not only one-side issue,it is about oil,currency flows,global risk and domestic costs all mixing together .
But West Asia situation staying tense makes whole thing more uncertain . If risk premium pushes crude oil prices beyond $90 per barrel for big parts of 2026,then fuel costs,inflation and government decisions can all get squeezed together.
And this is why RBI holding rates in June may be less about confidence and more about buying time . Question is,how long can wait-and-watch work if rupee keeps slipping and oil starts heating up again…
