More Stories

Informist, Friday, Feb. 6, 2026

 

MUMBAI - Shivaan Tandon, Asia economist, Capital Economics, said the following on the Reserve Bank of India's sixth bi-monthly monetary policy for 2025-26 (Apr-Mar) detailed on Friday:

 

The RBI kept the repo rate unchanged at 5.25% and sounded more confident on the growth outlook. With a key downside risk to growth having abated, thanks to the India-US trade deal, and inflation set to return to target in the coming quarters, we think there is little need for the central bank to resume its easing cycle.

The modest improvement in the growth outlook, driven by the sharp reduction in tariffs on imports from India to the US, is likely to have been the main reason the central bank opted against further easing. Indeed, the central bank revised up its growth forecast for the first two quarters of FY27 to 7% on average, from 6.8% previously.

 

RBI Governor Sanjay Malhotra noted that projections for subsequent quarters would be published after the upcoming rebasing of India's national accounts data, due in February. The upward revision is consistent with our view that the India-US trade deal is likely to boost growth by around 0.2–0.3 percentage points this year.

On inflation, Malhotra sounded a touch less dovish than at the previous meeting, and the central bank revised up its inflation forecast for the next two quarters, largely attributing the change to recent strength in precious metals prices. We think inflation is likely to return to the medium-term target of 4% by Oct-Dec as food prices normalise and base effects turn less favourable.

Overall, with the economic outlook having improved and inflation on its way back to target, the bar for resuming rate cuts is high. We think Friday's hold marks the end of the central bank's easing cycle.  End

 

Compiled by Shubham Rana

Filed by Avishek Dutta

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

 

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2026. All rights reserved.