The Reserve Bank of India (RBI) is anticipated to maintain its benchmark repo rate at 5.25% during the upcoming Monetary Policy Committee meeting, as it assesses the economic fallout from the ongoing war in Iran. This conflict has adversely affected the South Asian economy, leading to a record low for the rupee, which has surpassed 95 per U.S. dollar. Economists suggest that while the RBI has previously cut rates by a cumulative 125 basis points in 2025, the current economic environment calls for a neutral policy stance that neither stimulates nor restrains demand. The RBI is expected to inject liquidity into the system and may implement measures to support the rupee, such as special forex swap windows for oil companies. Furthermore, the central bank's growth forecasts for the 2026-27 financial year are likely to be revised downward, with GDP growth projected to slow to 6.3% if oil prices average $80 per barrel. Inflation is also a concern, with expectations of it averaging around 5% if oil prices remain high. The RBI's inflation target is reaffirmed at 4%, with a tolerance band of plus or minus 2 percentage points.