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Informist, Wednesday, Aug. 6, 2025

 

MUMBAI - Rajani Sinha, chief economist, CareEdge Ratings Ltd., said the following on the Reserve Bank of India's third bi-monthly monetary policy for 2025-26 (Apr-Mar) detailed on Wednesday:

 

"RBI's decision to leave the rates unchanged was in line with our expectations. While inflation has fallen sharply in the last few months, the Central Bank has reiterated that they would be looking at the inflation estimate for the quarters ahead. We project CPI inflation to rise above 4% in Q4 FY26 and average above 4.5% in FY27, given the low base of this year. This implies that next year we are looking at a real rate of interest in the range of 1-1.5% and it can even go lower. This limits the scope of any further rate cut in this cycle. Even while highlighting the concerns around the external sector, the Central Bank has chosen to keep the GDP growth projection for FY26 unchanged at 6.5%, marginally higher than our projection of 6.4%. While the high tariff imposed by the US poses downside risks, we have kept our growth forecast unchanged, given that the US trade policy is still very uncertain. Moreover, there are factors like a healthy monsoon, lower inflation, and lower income tax burden that would be supportive of growth this year."  End.

 

Compiled by Rati Chaphekar
Filed by Akul Nishant Akhoury

 

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