Economists viewed the Reserve Bank of India’s choice to retain the policy rate as a positive evaluation of growth and inflation trends. The RBI’s Monetary Policy Committee, in its initial review of 2026, opted to keep the repo rate steady at 5.25 percent. Analysts praised the decision to pause rate hikes, anticipating a prolonged pause by the RBI due to optimistic economic conditions and successful trade agreements.
Radhika Rao, Executive Director and Senior Economist at DBS Bank, emphasized the favorable macroeconomic outlook guiding the decision. She also mentioned the upcoming revisions to the CPI and GDP series later in the month. Madan Sabnavis, Chief Economist at Bank of Baroda, noted the absence of specific liquidity measures despite the RBI’s assurance, indicating a need-based approach.
Sabnavis highlighted the recent increase in the collateral-free loan limit to Rs 20 lakh as a follow-up to Budget initiatives for MSMEs. Prashant Sharma, President of NAREDCO Maharashtra, lauded the RBI’s rate pause for providing stability to the real estate sector amidst growing growth expectations post the Union Budget’s emphasis on increased government spending. Rajani Sinha, Chief Economist at CareEdge Ratings, estimated that tariff reductions from the India-US trade deal could potentially boost GDP growth by about 20 basis points.
Sinha revised the agency’s FY27 growth forecast to approximately 7.2 percent, with CPI inflation estimates hovering around 4 percent. Looking ahead, Sinha anticipated continued liquidity injections by the RBI, especially in the latter part of March during heightened tax-related outflows. The MPC raised its growth projection for the first half of FY27 by 20 basis points to 7 percent, alongside a 10 basis point increase in CPI inflation projections for FY26 and H1FY27.
