The Indian central bank keeps key interest rates unchanged, with the Indian Rupee's weakness becoming the focus of attention.

The Reserve Bank of India decided to keep interest rates unchanged at its first policy meeting after the outbreak of the Middle East crisis. The central bank is working to address the sharp depreciation of the rupee while also trying to support economic growth. The Monetary Policy Committee of the Reserve Bank of India unanimously voted to maintain the benchmark interest rate unchanged, keeping the benchmark repo rate at 5.25%, in line with expectations of all surveyed economists. The monetary policy stance remains neutral. This decision reflects the cautious attitude of the Reserve Bank of India. The escalating tensions between Iran and the United States are putting pressure on India's energy supply and economic growth prospects. Since the conflict began, the rupee has continued to decline, becoming the most pressing issue for the Reserve Bank of India, occupying a significant amount of policymakers' attention in recent days. About half of India's crude oil and most of its cooking gas rely on supplies from the Middle East, with the impact of the closure of the Strait of Hormuz particularly pronounced. Over the past year, the rupee has declined by about 7%, making it one of the worst-performing currencies in Asia. Despite the proactive measures taken by the Reserve Bank of India to curb speculative bets against the rupee, economists suggest that the continued surge in energy prices may ultimately force the central bank to raise interest rates. Reserve Bank of India Governor Sanjay Malhotra stated that they will cautiously control excessive fluctuations in the exchange rate.