New Delhi, June 2, 2026: The Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) is expected to maintain the status quo on interest rates at its June 2026 meeting, despite growing inflationary pressures and heightened global uncertainties, according to Abhishek Bisen, Head – Fixed Income at Kotak Mahindra Asset Management Company.
Bisen noted that the upcoming MPC meeting comes at a time when the economy is facing multiple challenges, including escalating geopolitical conflicts, rising crude oil prices, sharp depreciation of the Indian rupee, and concerns surrounding the monsoon season.
While consumer price inflation (CPI) remains relatively subdued at 3.48%, rising wholesale price inflation (WPI) and increasing fuel costs indicate the emergence of inflationary pressures in the economy. At the same time, India’s growth momentum remains resilient, although the outlook for FY27 has softened due to evolving domestic and global headwinds.
Financial markets have already begun pricing in the possibility of future rate hikes, leading to a rise in bond yields and risk premia as investors adopt a cautious stance.
Against this backdrop, Bisen expects the RBI to keep the repo rate unchanged at 5.25% in the June policy review. However, he believes the central bank is likely to adopt a more hawkish tone by revising its inflation projections upward, slightly lowering growth forecasts, and continuing to use foreign exchange interventions and related tools to manage currency volatility.
The policy outcome will be closely watched by market participants for cues on the RBI’s future policy direction amid a complex macroeconomic environment.
