Mumbai, June 1: A report by the State Bank of India (SBI) has said that there is no immediate requirement for a repo rate hike in the current policy environment, suggesting that the Reserve Bank of India (RBI) can instead depend on short-term monetary tools to manage pressure on the rupee.
The report observed that targeted and flexible policy instruments can help address currency volatility more efficiently without affecting overall growth momentum. It added that such measures allow the central bank to respond quickly to external shocks while maintaining financial stability.
SBI noted that India’s macroeconomic conditions remain broadly stable, with inflation expected to stay within a manageable range. Against this backdrop, the report indicated that a rate hike may not be necessary at this stage of the policy cycle.
Instead, it suggested that the RBI could continue using liquidity management operations and other short-term interventions to stabilise currency movements and support orderly market conditions.
The report also stressed the importance of maintaining growth-supportive policy settings, highlighting the need to balance inflation control with continued economic expansion.
Market participants are now watching upcoming RBI policy signals closely, as global financial uncertainty and currency fluctuations continue to shape monetary policy expectations.