As the Reserve Bank of India (RBI) on Friday decided to keep the repo rate unchanged at 5.25 per cent for the third time in a row, many experts across the industries have expressed their opinion on the same.
Srinivasan Vaidyanathan, Operating Partner, Essar Capital
The RBI’s decision to maintain the repo rate at 5.25 per cent with a neutral stance is a balanced response to a genuinely challenging macro environment. The more telling signal lies in the central bank’s evident caution on inflation, against a backdrop of elevated crude prices and a weaker rupee.
This suggests that while the RBI remains supportive of growth for now, it is increasingly vigilant about external risks and future actions will depend heavily on how energy prices and currency dynamics evolve. For capital-intensive businesses, the steadiness on rates is welcome, preserving the predictability that underpins long-cycle investment.
Jitendra Tanwar, Managing Director & CEO, Namdev Finvest Limited
RBI’s decision to maintain the repo rate at 5.25 per cent reflects a balanced and prudent approach towards supporting economic growth, while remaining vigilant about emerging inflationary pressures. By retaining its neutral policy stance, the Monetary Policy Committee (MPC) has signalled a preference to closely monitor evolving domestic and global developments before taking further policy action.
The RBI has revised its FY27 CPI inflation forecast upward to 5.1 per cent and moderated its GDP growth projection to 6.6 per cent, highlighting the challenges posed by geopolitical tensions, elevated crude oil prices, supply chain disruptions, rupee volatility and weather-related uncertainties, including the risk of a sub-normal monsoon and El Niño conditions.
Despite these headwinds, India’s domestic demand remains resilient. For businesses operating in Tier 2, Tier 3 and rural markets, policy stability provides the confidence needed to plan investments, expand operations, and pursue growth opportunities in an uncertain economic environment.
Indranil Pan, Chief Economist, YES BANK
This policy was more about addressing the paucity of foreign flows into the Indian economy and addressing the external sector problems, rather than addressing the growth-inflation dynamics.
The critical measures to boost FPI investments into the G-sec markets include tax measures such as withdrawal of withholding tax and the LTCG taxes.
Banks are allowed to raise FCNR (B) deposits of 3–5-year maturity with RBI bearing the full hedging cost. Banks are alsoallowed toraise ECBs with a concessional forex swap. While it is difficult to exactly pin down the exact nature of inflows, USD 35-45 billion may be a decent estimate, almost enough to close the gap for the anticipated BoP for FY27.
The policy challenge is to address the falling growth and rising inflation.
RBI, with its pause, has bought itself more time to understand the growth-inflation dynamics and probably did not want to immediately react with a rate hike to match its higher inflation forecasts.
