Get ready! The RBI's coffers open on April 8th; the first major update of the year on interest rate changes

The Reserve Bank of India (RBI) on Monday released the calendar of bi-monthly Monetary Policy Committee (MPC) meetings for the financial year 2026-27, with the first rate-setting meeting scheduled for April 6-8. 

The six-member rate-setting committee, headed by the Reserve Bank Governor, will hold six meetings in the next financial year. Typically, the six-member committee votes on a proposal on the third day of the meeting, 

and the RBI Governor announces the decision after the voting is complete. The statement said that the second bi-monthly policy review meeting will conclude on June 3-5, followed by three-day meetings in August, October, December, and February.

How does the MPC work?

India's Monetary Policy Committee (MPC) is a six-member body tasked with setting the benchmark policy rate (repo rate) to control inflation. 

It consists of three RBI officials (including the Governor, who is the Chairperson) and three external members appointed by the central government. 

The MPC announces bi-monthly monetary policy after deliberating on the current domestic and economic conditions and taking into account retail inflation. 

In its last meeting in February, the Committee had kept the short-term lending rate (repo rate) unchanged at 5.25 percent.

How much was cut last year?

The government initially notified the inflation target, along with a tolerance band, for the period 2016-2021 on August 5, 2016. In the first review in March 2021, this target was maintained for the next five years, until March 2026. 

The second review of this target is now scheduled for the end of March 2026. Last year, the RBI cut interest rates by 1.25%. 

The last time the RBI cut interest rates was in December, by 25 basis points. It will be interesting to see whether the RBI will keep interest rates on hold or increase them in April.

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