The Monetary Policy Committee of the RBI maintained repo rate unchanged at 5.50% at its policy review today, while retaining its ‘neutral’ policy stance
Download ReportQuantEco Research || RBI Policy - Status quo with subtle dovishness
The decision on an interest rate status quo was backed by all 6 MPC members, 2 favoured a switch to ‘accommodative’ policy stance. The central bank revised up its FY26 GDP growth forecast by 30 bps to 6.8%, while pruning its CPI inflation forecast by 50 bps to 2.6%. The key takeaways from the policy outcome include RBI’s emphasis on regulatory credit easing, enhancement of ease of doing business, and opening the door for further conventional monetary policy easing. We believe there could be some downside to RBI’s FY26 growth estimate on account of further protectionist measures announced by the US in recent weeks. The outlook on FY27 inflation could also see a downside if promised fiscal consolidation is maintained, international commodity prices stay range-bound, and monsoon conditions over the next 12-18 months stay normal. Overall, we continue to see space for another 25 bps rate cut from the MPC and retain our 10Y g-sec yield call of 6.30% for Mar-26