The Reserve Bank of India (RBI) kept its key policy rate unchanged on Wednesday, awaiting more tangible evidence of the impact of the war in Iran on the economy of the South Asian nation.
SUVODEEP RAKSHIT, CHIEF ECONOMIST, KOTAK INSTITUTIONAL EQUITIES, MUMBAI “We continue to anticipate a status quo from the RBI. They are monitoring food prices during the monsoon, given the El Niño risk, as well as the extent of the impact of raw material prices and second round effects.”
SUJIT KUMAR, CHIEF ECONOMIST, NATIONAL BANK FOR FINANCING INFRASTRUCTURE AND DEVELOPMENT, MUMBAI “The RBI’s macroeconomic outlook signals a slowdown in GDP growth to 6.9% for the fiscal year 2027…while IPC inflation is expected to climb to 4.6%. This assessment effectively ends the monetary easing cycle.” “The governor’s assurance of maintaining sufficient liquidity should reassure market participants, especially as ceasefire announcements ease short-term selling pressure on the rupee.”
KUNAL KUNDU, ECONOMIST, GENERAL SOCIETY, BENGALURU “In a context where the central bank must balance a still strong domestic demand and an external supply shock, maintaining rates is the most robust way to preserve options, avoid excessive reactions to short-term volatile price impulses, and strengthen the credibility of a data-dependent reaction function.”
ANUJ PURI, PRESIDENT, ANAROCK GROUP, MUMBAI “Keeping rates unchanged ensures stability for current and future home loan borrowers. Monthly installments will remain unchanged, facilitating financial planning. This is excellent news for buyers, who can now move forward with more confidence.”
GARIMA KAPOOR, ECONOMIST, INSTITUTIONAL EQUITIES, ELARA SECURITIES, MUMBAI “We do not foresee a rate hike by the monetary policy committee until IPC inflation remains sustainably below 6% and inflation expectations are anchored.” “We believe the RBI’s growth estimate of 6.9% for the fiscal year 2027 may need reassessment as a return to pre-war energy export volumes could take three to six months due to accumulated delays, tanker diversions, and partial infrastructure damage.”
SACHCHIDANAND SHUKLA, CHIEF ECONOMIST, LARSEN & TOUBRO GROUP, MUMBAI “The RBI’s actions and stance will certainly be helpful, but may prove insufficient in the face of supply disruptions, tariffs, and looming AI-related concerns.”
RADHIKA RAO, SENIOR ECONOMIST, DBS BANK, SINGAPORE “The RBI’s monetary policy outlook has shifted from a scenario of moderate inflation and strong growth to a more cautious balance.” “A neutral stance also allows for agility in policy adjustments in case the war lasts longer than expected. The central bank’s remarks on inflation indicate a fear that a prolonged supply shock could turn into a demand shock. This suggests that second-round effects should materialize before rate hikes become a realistic option.”
SUJAN HAJRA, CHIEF ECONOMIST AND EXECUTIVE DIRECTOR, ANAND RATHI GROUP, MUMBAI “The RBI is expected to maintain its data-dependent approach, hinting at an extended rate pause.”
VIKRAM CHHABRA, SENIOR ECONOMIST, 360 ONE ASSET, MUMBAI “Economic prospects remain clouded by uncertainty.” “The two-week ceasefire in the Middle East has eased tensions for now, but risks to inflation and growth continue to weigh on the economy. El Niño adds pressure, threatening a weak monsoon and rising food prices.” “As long as war and supply issues remain unresolved, the RBI is likely to stay on hold until a clearer picture emerges.”
UPASNA BHARDWAJ, CHIEF ECONOMIST, KOTAK MAHINDRA BANK, MUMBAI “As expected, the RBI kept its rates and stance unchanged.” “After circulars restricting offshore speculative activity, the recent de-escalation in geopolitical front has provided some relief to the Indian rupee, giving the RBI the necessary leeway to evaluate the lasting impact on growth and inflation.” “We expect the RBI to now strictly follow data dependency given the fluidity of the situation. Additionally, we anticipate close monitoring of liquidity conditions.”
