RBI will keep the repo rate unchanged

RBI is likely to keep the repo rate unchanged while maintaining a neutral stance that shall allow it to have flexible approach in dealing with dynamic domestic and global macro environment. Retail inflation remains below the RBI's 4% target; however, challenges emerge from concerns over rupee depreciation, recent fuel price hikes, potential food inflation from weather-related risks, and global commodity volatility.

The central bank is expected to closely monitor the rupee and liquidity conditions rather than use interest rates aggressively to defend the currency. Inflation projections could be revised marginally upward while alterations to growth estimates would be monitorable, the emphasis is likely to remain on balancing growth support with price stability.

Overall, the policy is expected to be status quo on rates, vigilant on inflation, and supportive of financial stability and growth.