Expected lines:
“RBI maintaining the status quo on policy rate is on expected lines. The Governor’s projection of FY26 GDP growth at 7.6 per cent underscore the resilience of the Indian economy. Further RBI’s earlier measure of extending the timeline for providing financial assistance to exporters until June 30, 2026, will help the exporters in tiding away the current global turmoil.” -Binod Kumar, MD & CEO, Indian Bank.
Inflation projection within target range:
“The projections on growth and inflation—the first estimates by the MPC for fiscal 2027 following the release of the new data series—reflect the recognition that the impact on growth could be greater than that on inflation in the near term. Part of the moderation in India’s GDP growth expected is also due to a statistical high-base effect of fiscal 2026. The MPC projects inflation at 4.6% for fiscal 2027, within its target range. The committee expects gross domestic product growth to moderate to 6.9% this fiscal from 7.6 per cent in the previous year. Part of the moderation is also due to the high base of fiscal 2026. Additionally, producers are bearing the brunt of the dual shock of energy and other input shortages and price spikes, which could impact economic growth. Some impact on the economy could be enduring, though the overall fallout will depend on the duration and intensity of the conflict.”- Dipti Deshpande, Principal Economist, Crisil Ltd.
Projections likely to be updated:
“Given the uncertainties on the conflict in the Middle East as can be seen from the developments over the last 12 hours, the MPC has acted prudently as was expected to hold the policy rates. The inflation projections have been raised but it is still projected to be in the target range in all the quarters. Growth projections have been moderated and these are likely to be updated with emerging situation and spillovers from the conflict on energy and logistics costs and constraints.”- Ranen Banerjee, Partner and Economic Advisory Leader, PwC India.
Rate Stability Offers Breathing Room for Homebuyers
“As expected, the RBI kept the repo rate unchanged in a balanced and cautious approach to the ongoing geopolitical situation in West Asia. While there are still a lot of unknowns, the recent announcement of a ceasefire gives fresh hope for more stability in the future, even though the market is still very volatile in the short term. Keeping rates steady means stability for current and future home loan borrowers. EMIs will remain unchanged, which makes planning for the future easier. This is especially good news for people buying homes, who can now move forward with more confidence.” – Anuj Puri, Chairman – ANAROCK Group.
Expectations remain for a prolonged pause in policy rates
“RBI struck a cautious tone in its policy, with downside risks to its FY 27 growth projections of 6.90 per cent and upside risks to its inflation projections of 4.60 per cent in the background of supply side pressures emanating from the prevailing geopolitical conflict over the medium term, even as a temporary truce emerged overnight. “Going forward, expectations remain for a prolonged pause in policy rates.”- Basant Bafna, Head – Fixed Income, Mirae Asset Investment Managers (India).
‘Safety-first’ approach
“The RBI’s decision to keep the repo rate unchanged reflects a balanced and ‘safety-first’ approach, prioritising macroeconomic stability. While the Indian economy continues to demonstrate strong growth at 7.6 per cent, a cautious stance is warranted amid evolving global uncertainties, particularly geopolitical tensions in West Asia and volatility in crude oil prices. By maintaining the rates steady, the RBI is reinforcing the sustainability of the ongoing recovery while ensuring predictability in borrowing costs which is a welcome relief for both households as well as businesses. The removal of due diligence requirements for onboarding onto the TReDS platform is a progressive step that will significantly enhance liquidity access and working capital efficiency for small businesses.” – Ajay Kumar Srivastava, Managing Director & CEO, Indian Overseas Bank.
