The Reserve Bank of India (RBI) is likely to apply the pause button on continuous hikes in repo rates during next week's meeting of its monetary policy committee (MPC), says a report by the State Bank of India's (SBI) research wing.

"We expect the RBI to pause in April policy... It has enough reasons to pause in April. There are concerns of a material slowdown in affordable housing loan market and financial stability concerns taking centre stage," SBI's research report titled "Prelude to MPC Meeting", which was released on Monday, said.

The RBI's rate setting MPC's meeting is scheduled to take place between April 3 to 5.

The SBI report further noted that "while concerns on sticky core inflation is justified, it may be noted that average core inflation is at 5.8 per cent over the last decade and it is almost unlikely that core inflation could decline materially to 5.5 per cent and below as post pandemic shifts in expenditure on health and education and the sticky component of transport inflation with fuel prices staying at elevated levels will act as the constraint. By this logic, the RBI may then have to go for more round of rate hikes".

Commenting on the global economic scenario, the report said that as per the latest data, bank borrowings from the recently announced Fed Bank term funding programme window reveal that fears of a greater bank contagion is receding, though deposits of small banks continue to decline at expense of larger banks.

"Smaller banks seems to be borrowing from Fed to overcome any deposit run. Thus, global conditions are still evolving and fluid," the SBI research report added.