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Informist, Wednesday, Aug. 6, 2025

 

MUMBAI - V.R.C. Reddy, head of treasury, Karur Vysya Bank, said the following on the Reserve Bank of India's third bi-monthly monetary policy for 2025-26 (Apr-Mar) detailed on Wednesday:

 

"Reserve Bank of India kept the repo rate unchanged and maintained its neutral stance in today's policy announcement, broadly aligning with the market's mixed expectations. While a cumulative 100 bps rate cut is still working its way through the system, transmitting at a relatively swift pace, global uncertainties, including continued US tariff actions and recent rupee depreciation, have led the RBI to adopt a cautious approach.

 

Persistent core inflation and a projected CPI trajectory close to 5% from the beginning of the next fiscal are also tempering the space for near-term rate cuts. However, expectations of a dovish tilt by the US Federal Reserve amid soft labour market data and concern over domestic growth, particularly in light of higher US tariffs, continue to keep the door open for a rate cut in the October policy.

 

While today's outcome may seem moderately hawkish, the underlying tone suggests that the RBI is preserving policy flexibility. With a neutral stance and comfortable system liquidity, the central bank remains well-positioned to ease policy further if evolving global or domestic conditions necessitate it."  End

 

Compiled by Ketaki Patil
Filed by Akul Nishant Akhoury 

 

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