India's Central Bank Likely to Maintain Rates Amid Middle East Crisis

India's central bank is expected to keep its interest rates unchanged on Wednesday, marking its first policy decision since the onset of the Iran conflict. According to Jin10, the bank is striving to balance economic growth support with addressing the significant depreciation of the rupee. All 30 economists surveyed by Bloomberg anticipate that the Reserve Bank of India (RBI) will maintain the benchmark repo rate at 5.25%. Despite a dimming economic outlook since the last meeting, the RBI had previously indicated a prolonged pause in rate changes. The Middle East crisis has placed the Monetary Policy Committee in a challenging position. The rupee's decline since the conflict began has become a major pressure point, prompting the RBI to take its most aggressive measures in over a decade to curb speculative bets against the currency. The central bank now faces a dilemma: whether to raise rates to support the rupee or keep borrowing costs low to cushion economic growth.