“The RBI’s June 2026 MPC meeting comes amid heightened uncertainty due to global conflicts, rising crude prices, sharp rupee depreciation, and monsoon risks. While CPI inflation remains benign at 3.48%, surging WPI and fuel costs signal emerging pressures. Growth remains strong but is facing headwinds, with the FY27 outlook softening. Bond yields and risk premia have risen, reflecting market caution. Against this backdrop, while markets are pricing in potential rate hikes ahead, the RBI is likely to hold the repo rate at 5.25% for now but adopt a more hawkish tone—raising inflation forecasts, slightly trimming growth projections, and relying on forex tools to manage currency volatility.”