RBI’s Bi-Monthly Monetary Policy 8th April 2026 – Key Takeaways & Highlights

The Monetary Policy Committee (MPC) held its 60th meeting from April 6 to 8, 2026, under the chairmanship of Shri Sanjay Malhotra, Governor, Reserve Bank of India. The MPC members Dr. Nagesh Kumar, Shri Saugata Bhattacharya, Prof. Ram Singh, Dr. Poonam Gupta and Shri Indranil Bhattacharyya attended the meeting. After a detailed assessment of the evolving macroeconomic and financial developments and the outlook, the MPC voted unanimously to keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 5.25 per cent; consequently, the standing deposit facility (SDF) rate remains at 5.00 per cent and the marginal standing facility (MSF) rate and the Bank Rate at 5.50 per cent. The MPC also decided to continue with the neutral stance.

RBI Monetary Policy (8 April 2026)

1. Policy pause continues:
   RBI kept the repo rate unchanged at 5.25% and maintained a Neutral stance, signalling flexibility amid uncertain global conditions.
2. Inflation remains the key risk:
   FY27 CPI inflation projected at 4.6%, with upside pressures from crude oil prices, supply‑chain disruptions and geopolitical tensions.
3. Growth outlook steady:
   Real GDP growth for FY27 projected at 6.9%, reflecting resilience of domestic demand despite external headwinds.
4. Liquidity management assured:
   RBI committed to maintaining adequate liquidity and fine‑tuning money market conditions to ensure smooth policy transmission.
5. Balanced, cautious approach:
   Policy reflects a “wait‑and‑watch” strategy, prioritising inflation control while supporting growth and safeguarding macro‑financial stability.

RATIONALE FOR THESE DECISIONS.

The MPC noted that since the last policy meeting, geopolitical uncertainties have heightened significantly. Headline inflation remains contained and below the target. However, upside risks to the inflation outlook, driven by increased energy price pressures and probable weather disturbances affecting food prices, have increased. Core inflation pressures remain muted, although supply chain dislocations and the risk of second-round effects render the future inflation trajectory uncertain.

The MPC further noted that high frequency indicators till February 2026 suggest the continuation of strong momentum in economic activity. Growth impulses continue to be supported by robust private consumption and investment demand. However, the West Asia conflict is likely to impede growth. Higher input costs associated with increase in energy prices and international freight and insurance costs along with supply-chain disruptions that would constrain availability of key inputs for downstream sectors, would impair growth. The Government has taken several measures targeted at supporting exports and protecting supply chains. This should mitigate the adverse impact of the conflict.

The MPC opined that the intensity and the duration of the conflict and the resultant damage to the energy and other infrastructure add risk to the inflation and growth outlooks. However, the fundamentals of the Indian economy are on a stronger footing, providing it with greater resilience to withstand shocks now than in the past. The economy is confronted with a supply shock. It is prudent to wait and watch the changing circumstances and the evolving growth-inflation outlook. Accordingly, the MPC voted to keep the policy rate unchanged even as it remains vigilant, closely monitoring incoming information and assessing the balance of risks. The MPC also decided to continue with the neutral stance, retaining the flexibility to respond judiciously to incoming information.

 RBI Monetary Policy Highlights – 8 April 2026

1. Policy Rates

• Repo Rate: 5.25% (Unchanged) [livemint.com]
• Policy Stance: Neutral (continued) [livemint.com]
• Standing Deposit Facility (SDF): 5.00%
• Marginal Standing Facility (MSF) Rate: 5.50%
• Bank Rate: 5.50% [livemint.com]
• Decision: Unanimous vote by all 6 MPC members to maintain status quo [livemint.com]

2. Inflation Outlook

• CPI Inflation Projection for FY27: 4.6% (slightly higher than earlier estimate) [livemint.com]
• Quarter-wise CPI inflation (FY27):
  • Q1: 4.0%
  • Q2: 4.4%
  • Q3: 5.2%
  • Q4: 4.7% [livemint.com]
• RBI reiterated that headline inflation remains the primary target, with risks tilted upwards due to:
  • Elevated crude oil prices
  • Global supply chain disruptions
  • West Asia geopolitical tensions [thehindu.com]

3. Growth Projection

• Real GDP Growth for FY27: 6.9% [livemint.com]
• Quarter-wise GDP growth estimates (FY27):
  • Q1: 6.8%
  • Q2: 6.7%
  • Q3: 7.0%
  • Q4: 7.2% [livemint.com]
• RBI noted that India’s macroeconomic fundamentals remain strong despite global uncertainties [thehindu.com]

4. Liquidity & Banking

• RBI to ensure adequate liquidity and remain data-dependent
• May actively use liquidity management tools such as VRRR to keep money market rates within policy corridor [firstpost.com]
• No change in CRR (3%) announced in this policy [livemint.com]

5. External Sector & Risks

• RBI flagged that:
  • West Asia conflict could widen Current Account Deficit (CAD)
  • Volatility in crude oil and capital flows poses risks to inflation and rupee stability [thehindu.com]
• RBI emphasised India is better positioned than in earlier global crises to absorb shocks [financialexpress.com]

6. Overall Assessment

• RBI adopted a “wait and watch” approach
• Focus remains on:
  • Anchoring inflation expectations
  • Supporting growth without overstimulating demand
  • Retaining flexibility amid global uncertainty [cnbctv18.com]

Key Takeaways – RBI Monetary Policy (8 April 2026)

• Status quo on policy rates:
  RBI kept the repo rate unchanged at 5.25%, marking an extended pause after cumulative rate cuts since Feb 2025.
• Neutral policy stance maintained:
  The MPC continued with a “Neutral” stance, retaining flexibility to act depending on inflation and growth dynamics.
• Inflation remains the priority:
  FY27 CPI inflation projected at 4.6%, slightly above earlier estimates, with upside risks from crude oil prices, supply disruptions and global geopolitical tensions.
• Growth outlook remains resilient:
  Real GDP growth for FY27 projected at 6.9%, reflecting strong domestic demand and macroeconomic stability despite global uncertainty.
• Quarterly dynamics indicate recovery:
  Growth expected to moderate in early FY27 and strengthen in the second half, while inflation is projected to peak in Q3 before easing.
• Liquidity to remain adequately managed:
  RBI reaffirmed its commitment to maintaining adequate systemic liquidity and using fine‑tuning tools to keep short‑term rates aligned with policy signals.
• External risks flagged:
  RBI highlighted risks from West Asia geopolitical tensions, which could affect crude prices, inflation trajectory, rupee stability and the current account deficit.
• Calibrated “wait and watch” approach:
  The policy reflects a balanced approach—supporting growth while remaining vigilant on inflation and global spillover risks.
• Market reassurance:
  Stable rates are expected to support borrowing sentiment, investment planning and financial market confidence in the near term.

 Impact of the West Asia Conflict on the Indian Economy:

The Governor elucidated on the channels of transmission through which the Indian economy may get impacted by the ongoing conflict.

• First, elevated crude oil prices could increase imported inflation and widen the current account deficit.
• Second, disruptions in energy markets, fertilisers and other commodities may adversely impact industry, agriculture and services, reducing domestic output.
• Third, heightened uncertainty, increased risk aversion and safe haven demand could impact domestic liquidity conditions, economic activity, consumption and investment.
• Fourth, weaker global growth prospects may dampen external demand and reduce remittance flows.
• Finally, adverse spillovers from global financial markets could tighten domestic financial conditions and raise the cost of borrowing.
• Overall, the initial supply shock can potentially transform into a demand shock over the medium term if the restoration of supply chains is delayed.

Growth: As per the new GDP series (base year 2022-23), real GDP growth for 2025-26 is estimated at 7.6 per cent.

• Real GDP growth for 2026-27 is projected at 6.9 per cent,
• with Q1 at 6.8 per cent;
• Q2 at 6.7 per cent;
• Q3 at 7.0 per cent; and
• Q4 at 7.2 per cent.
• Further escalation and wider spread of the conflict, heightened volatility in global financial markets and weather-related events, however, weigh on the domestic growth outlook. Risks to the baseline projections are tilted to the downside, with uncertainty remaining elevated due to the ongoing West Asia conflict.

Inflation: In January-February, headline inflation continued to remain below target (2.7 per cent and 3.2 per cent, respectively), with food group recording inflation vis a vis a deflation in the previous four months. Inflation in fuel items was modest. Core inflation was at 3.7 per cent and the underlying price pressures benign, as evident from the much lower core inflation excluding precious metals at 2.1 per cent.

• CPI inflation for 2026-27 is projected at 4.6 per cent with
• Q1 at 4.0 per cent;
• Q2 at 4.4 per cent;
• Q3 at 5.2 per cent; and
• Q4 at 4.7 per cent.
• Core inflation is projected at 4.4 per cent. Excluding precious metals, core inflation is even lower indicating that underlying inflation pressures are expected to remain contained. The risks are on the upside.

External Sector: Expected robustness in services exports and inward remittance receipts during Q4:2025-26 should keep India’s current account deficit moderate and within the sustainable level in 2025-26. Rising global uncertainties and elevated prices of key energy commodities pose some upside risks to India’s current account deficit in 2026-27.

Gross foreign direct investment (FDI) witnessed strong growth, while net FDI showed improvement. India remains an attractive destination for greenfield FDI projects. Foreign portfolio investment (FPI) to India, driven by outflows in the equity segment, recorded net outflows of US$ 16.5 billion in 2025-26, followed by outflows of US$ 5.4 billion in 2026-27 (till April 6).

As on April 3, 2026, India’s foreign exchange reserves stood at US$ 697.1 billion. These are adequate in terms of the standard metrics of reserve adequacy including import cover (about 11 months) and external debt (91.1 per cent).

Liquidity and Financial Market Conditions:

System liquidity, as measured by the net position under the Liquidity Adjustment Facility (LAF), stood at an average daily surplus of ₹2.3 lakh crore since the last MPC meeting. Since then, the weighted average call rate (WACR) traded in the lower half of the corridor except towards end-March. Short term money market rates, especially those of commercial papers and certificates of deposit, remained elevated. G-Sec yields remained largely rangebound with a softening bias in February but firmed up thereafter on account of the ongoing conflict, hardening global yields and the rise in energy prices. Transmission in the credit market remained satisfactory.

The Governor further stated to ensure sufficient liquidity in the banking system, the Reserve Bank proactively undertook durable and transient liquidity measures. Going ahead, RBI will continue to be proactive and pre-emptive in liquidity management and ensure sufficient liquidity in the banking system to meet the productive requirements of the economy.

Financial Stability

The system-level financial parameters related to capital adequacy, liquidity, asset quality and profitability of Scheduled Commercial Banks (SCBs) continue to remain healthy. Similarly, the system-level parameters of NBFCs too are sound, with adequate capital position and improved GNPA ratios.

As per the latest available data, credit from all sources grew at 14.3 per cent (y-o-y) as compared to 11.7 per cent (y-o-y) a year ago. Bank credit growth maintained its upward trajectory, and remained broad-based.

Additional Measures:

• Promoting ease of doing business. There are three measures proposed to promote ease of doing business.

1. First, to facilitate better utilisation of Bank Board’s time, after a comprehensive review of all our extant instructions, RBI proposed to revise and rationalise the matters requiring its attention.
2. Second, It may be recalled that RBI had recently undertaken a detailed exercise, to consolidate over 9000 regulatory instructions into 238 Master Directions. A similar consolidation exercise has now been completed for all our supervisory instructions.
3. Third, to facilitate ease of doing business by MSMEs, RBI proposed to dispense with the requirement of due diligence while onboarding them on TReDS platforms.

Supporting Capital Adequacy: There are two measures regarding capital adequacy of banks.

1. First, it is proposed to remove the condition regarding NPA provisioning for inclusion of quarterly profits in CRAR computation.
2. Second, in view of the developments in prudential framework over the years, it is proposed to dispense with the requirement to maintain an Investment Fluctuation Reserve (IFR) as an additional buffer to hedge against depreciation in the value of investments.

Development of Money Market: For further development of the term money market, RBI proposed decided to permit certain additional categories of non-bank entities in this market segment. At present, only banks and standalone primary dealers (SPDs) are eligible to participate in this market. The Governor also mentioned of enhancing the borrowing limit of SPDs in the term money market.

 RBI Monetary Policy: Comparison Table

Parameter	Previous Policy (Feb 2026)	Latest Policy (8 April 2026)
Repo Rate	5.25% (unchanged)	5.25% (unchanged)
Policy Stance	Neutral	Neutral (continued)
MPC Decision	Unanimous	Unanimous
Inflation Outlook	CPI for FY27 around 4.5%	CPI for FY27 revised upward to 4.6%
Growth Projection	GDP outlook around 6.9%	GDP growth for FY27 retained at 6.9%
Liquidity Position	Adequate liquidity assured	Adequate liquidity with fine‑tuning tools
Major Risk Factors	Global uncertainty, crude prices	Geopolitical risks, crude oil volatility, supply disruptions
Policy Approach	Cautious, data‑driven	Calibrated “wait‑and‑watch” approach reinforced
Overall Signal	Extended pause after rate cuts	Continuation of pause with inflation vigilance

• The minutes of the MPC’s meeting will be published on April 22, 2026.
• The next meeting of the MPC is scheduled for June 3 to 5, 2026. 

Source: rbi.org.in; livemint; The Hindu; Cnbctv18; firstpost; financial express

Plick on the following link to read the Governor's Statement: :https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=62515 and for Monetary Policy Statement :Monetary Policy Statement