RBI’s rate-setting panel is in step with other major central banks

Over the past three days, 6-8 April 2026, the Reserve Bank of India’s (RBI) six-member Monetary Policy Committee (MPC) that is responsible for setting the policy interest rate (repo) has, doubtless, burnt the proverbial midnight oil deliberating on the growth-inflation trade-off. As expected, it has concluded, like most central banks, that it is best to mark time.The ceasefire in the West Asia conflict, announced just a little over an hour before US President Donald Trump’s deadline to “wipe out an entire civilisation” was to end (and, coincidently, just hours before RBI governor Sanjay Malhotra’s statement), brings only a temporary reprieve (of a fortnight).It is far from clear whether the ceasefire will hold.

More importantly, whether it will lead to lasting peace in a region that has been the scene of more wars than perhaps any other and is crucial to global energy security. Unlike markets that tend to react like a cat on a hot tin roof—the Sensex shot up more than 3.6% in the first half hour of trade on Wednesday—central banks are expected to know better; and react in a more measured and mature fashion.

RBI did just that. It kept its policy repo rate (at which it infuses liquidity into the banking system) unchanged at 5.25% and retained its neutral policy stance.

It can take comfort that it is not the only major central bank to have opted to keep its powder dry. Rather, it joins central banks like the US Federal Reserve, Bank of England, European Central Bank and Bank of Japan, all of which have preferred to wait and watch.Ironically, the growth-inflation mix facing each of these central banks is different.