(Reuters) -The Reserve Bank of India (RBI) kept its key repo rate unchanged at 5.50% on Wednesday, in line with market expectations, as it evaluates the impact of earlier rate cuts and recent tax reductions amid global trade uncertainties.
The central bank had cut the repo rate by a total of 100 basis points in the first half of 2025, but paused at its previous meeting in August.
COMMENTARY:
SAKSHI GUPTA, PRINCIPAL ECONOMIST, HDFC BANK, GURUGRAM
“A rate cut in December is not a given yet and would be driven by how growth momentum performs over the coming months – particularly in regards to the tariff outcome and strength of the pick up in domestic consumption.”
“We remain cautious on growth compared to the RBI, with our forecast at 6.6% for FY26. In the event that tariff risks recede, our growth forecast would see some upside.”
UPASNA BHARDWAJ, CHIEF ECONOMIST, KOTAK MAHINDRA BANK, MUMBAI
“The growth risks from tariff uncertainties have created room for additional rate cuts if risks materialise.”
“We see scope for 25-50 bps rate cuts in the rest of FY26”
ANIL REGO, FOUNDER AND FUND MANAGER, RIGHT HORIZONS PMS, BENGALURU
“After a front-loaded 100 bps of rate cuts earlier this year and a CRR reduction, the central bank has now shifted to an assessment phase, aiming to allow past policy actions to transmit fully into the system.”
“The downward revision of FY26 CPI inflation forecast reflects growing confidence that price pressures are well-anchored, aided by recent GST rationalisation and easing input costs.”
“This creates room for further monetary accommodation later, potentially as early as the December meeting.”
DHIRAJ NIM, FX STRATEGIST, ANZ BANK, MUMBAI
“The RBI sees space to support growth, but preferred to save the bullet for now, for when weakness actually kicks in.”
“Its economic outlook revision makes sense – weaker growth in the second half of FY26 and moderating inflation outlook.”
“We (will) have one more cut in December 2025 and then long hold.”
MADHAVI ARORA, CHIEF ECONOMIST, EMKAY GLOBAL FINANCIAL SERVICES, MUMBAI
“The RBI has been consistently revising down its FY26 inflation since April, after quarterly prints undershot. Since June, RBI’s inflation resets have been dramatic, and forecast revisions have continued in October policy, which we think could see another undershoot by December.”
RADHIKA RAO, SENIOR ECONOMIST, DBS BANK, SINGAPORE
“It was prudent to leave the repo rate unchanged.”
“The policy commentary was more balanced than markets expected.”
“Down the line, we don’t expect the central bank to talk down bond yields, instead preferring to provide dovish guidance and openness to conduct market operations to help contain a further rise in yields.”
SUJAN HAJRA, CHIEF ECONOMIST & EXECUTIVE DIRECTOR, ANAND RATHI GROUP, MUMBAI
“In the near term, India’s domestic reforms are likely to more than offset the negative impulses from abroad.”
“The sharp softening of the U.S. interest rate outlook also has important consequences for India’s policy trajectory.”
“The door is open for a rate cut of 25–50 basis points.”
TERESA JOHN, LEAD ECONOMIST, NIRMAL BANG, MUMBAI
“Despite status quo, the commentary is dovish.”
“CPI inflation has been revised down to 2.5% while growth is expected to moderate in the second half of FY26, both of which open up policy space for rate cuts largely on external headwinds.”
“We expect a 25bps rate cut in December.”
(Reporting by Nishit Navin, Nandan Mandayam, Vivek Kumar M, Bharath Rajeswaran, Meenakshi Maidas, Yagnoseni Das, Urvi Dugar; Compiled by Dhanya Skariachan; Editing by Eileen Soreng)
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