RBI Policy
MPC decision takes US-Iran ceasefire into account, says Malhotra
This story was originally published at 14:53 IST on 8 April 2026
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--RBI Malhotra: US-Iran ceasefire taken into account for monetary policy
--RBI Malhotra on Iran war ceasefire: Got pleasant news at 0530 IST
--RBI Malhotra: Our CPI projections take into account supply shock
--RBI Malhotra: There will be cos, sectors hit by war in West Asia
--RBI Malhotra: Don't see West Asia war impacting banks' profitability
--RBI Malhotra: Don't know extent of damage caused by West Asia war
--RBI Malhotra: Can't give timeline to undo damage caused by West Asia war
NEW DELHI – The Monetary Policy Committee's decision takes into account the ceasefire between Iran and the US announced early Wednesday, Reserve Bank of India Governor Sanjay Malhotra said. The MPC, which met Mon-Wed, decided to leave the policy repo rate unchanged at 5.25% and retain the 'neutral' stance.
The global situation is evolving "drastically" and "frequently"--like there was pleasant news at 0530 IST, Malhotra said, referring to the ceasefire. The RBI's MPC will take a call going ahead based on how the factors play out, Malhotra said at the post-policy press conference. "The ceasefire, to some extent, has been taken into account. The whole implications, we'll come to know."
Based on its assessment of the economy, the RBI Wednesday projected India's GDP to grow 6.9% in FY27 with CPI inflation at 4.6%. The RBI expects improvement in these estimates, if the ceasefire between the US and Iran continues, Malhotra said.
But as of now, the CPI inflation projection takes into account supply shock, Malhotra said. Supply shock has become a concern following the joint military attack on Iran by the US and Israel on Feb. 28. Since then, the threat of Iranian attack has effectively shut the Strait of Hormuz, disrupting the transit of around a fifth of the world's crude oil.
After the ceasefire, Iran has committed to opening the Strait of Hormuz. "But we are not aware how much damage has happened, or how long it will take to restore some facilities in the Gulf that were shut due to the conflict," Malhotra said.
The war has affected several Indian businesses, and the RBI is deliberating the measures it can roll out to help such sectors, Malhotra said. The RBI is considering whether steps to allow a 100% loan waiver would be needed, or whether a targeted waiver would be the better option, Malhotra said. Meanwhile, the RBI does not expect the war to impact the profitability of Indian banks, Malhotra said. End
Reported by Krity Ambey
Edited by Akul Nishant Akhoury
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