RBI board assesses impact on financial markets amid geopolitical tensions

RBI board reviews global and domestic economic scenario, as rising oil prices, rupee pressure and geopolitical tensions pose challenges for monetary policy outlook

The Reserve Bank of India’s central board, which met on Friday, took stock of the current geopolitical developments and their impact on the financial markets, a statement from the central bank said.

 

This was the first board meeting of the central bank since the war broke out in West Asia in late February. Oil prices have surged, demand for the dollar from importers has increased, and the rupee has come under pressure. The previous board meeting was on 23 February, held in New Delhi.

 

The Indian unit, which hit an all-time low closing of 93.72 on Friday, depreciated 2.92 per cent in March so far.

 

“The Board assessed the emerging global and domestic economic scenario, including the evolving geopolitical developments and their impact on financial markets, along with associated challenges,” the statement said.

 

Spike in oil prices and the depreciation of the rupee could pose a challenge for the central bank to maintain the lower-for-longer narrative of the monetary policy committee. The rate-setting panel has cut the policy repo rate by 125 bps to 5.25 per cent since February last year and had indicated rates are unlikely to go up in the near future.

 

The RBI Board, which met in Patna, approved the RBI’s budget for the accounting year 2026–27 and also the Bank’s Medium Term Strategy Framework (Utkarsh 3.0) for the period 2026–29.

 

Sanjay Malhotra, Governor, chaired the 622nd board meeting, which was attended by Deputy Governors T Rabi Sankar, Swaminathan J, Poonam Gupta, and Shirish Chandra Murmu.

 

Other directors of the Central Board — Anuradha Thakur, Secretary, Department of Economic Affairs; Revathy Iyer; Sachin Chaturvedi; and Ravindra H Dholakia — also attended the meeting, the statement added.