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The Reserve Bank of India maintained its key repo rate at 5.25%, citing economic uncertainty stemming from the Iran war. Rising oil prices are expected to weigh heavily on India's economic growth.

India's Central Bank Freezes Key Rate

The Reserve Bank of India (RBI) announced on April 8 its decision to keep the benchmark repo rate unchanged at 5.25%. This move reflects the central bank's stance to observe the economic repercussions of the Iran war more closely before making any adjustments. A Reuters poll conducted from March 23-26 showed that 69 out of 71 economists had predicted a rate hold.

Iran War and Oil Price Surge Pressure Indian Economy

The Indian government anticipates an economic growth rate of over 7% for the fiscal year starting April, with inflation hovering around the central bank's target of 4%. However, the recent surge in crude oil prices, following attacks on Iran by the U.S. and Israel, casts a shadow over these projections. Elevated oil prices are expected to significantly dampen growth and intensify inflationary pressures in India.

*Source: Reuters (2026-04-08)*

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