RBI Poised to Maintain Interest Rates Amid Brent Crude Surge

The Reserve Bank of India (RBI) is likely to keep interest rates steady in its August monetary policy committee meeting, according to a Moneycontrol poll of 13 market participants. The poll shows all participants expect the RBI to maintain the status quo on interest rates, a stark contrast from the previous MPC poll where some expected a rate hike.

The recent surge in Brent crude prices to near $100 per barrel has not influenced the market participants' expectations, despite the previous expectation of a rate hike due to high inflation. The RBI had introduced measures in June to prop up capital inflows, including ultra-long bonds under the Fully Accessible Route (FAR) and hedging cost support for foreign currency non-resident bank (FCNR-B) deposits.

Market participants believe that the RBI will closely monitor the effectiveness of these measures and may wait for greater clarity on global developments before altering its growth projections. The RBI had projected real GDP growth at 6.6 percent for FY27, down from its previous forecast of 6.9 percent.