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CareEdge Ratings Chief Economist Rajani Sinha on RBI Policy
This story was originally published at 13:13 IST on 6 February 2026
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NEW DELHI - Rajani Sinha, chief economist at CareEdge Ratings, said the following on the Reserve Bank of India's sixth bi-monthly monetary policy for 2025-26 (Apr-Mar) detailed on Friday:
The Monetary Policy Committee's decision in its February meeting to maintain status quo on both the policy rate and stance was in line with our expectations. The committee revised up its average growth projection for Apr-Sept, FY27 by 20 basis points to 7%, while CPI inflation projections for FY26 and Apr-Sept, FY27 each were raised by 10 bps. Based on our estimates, the proposed tariff reduction could add around 20 bps to GDP growth, leading us to project growth of 7.2% for FY27. CPI inflation is expected to average close to 4% in FY27. However, the forthcoming new series for both CPI and GDP will need close monitoring, as these could lead to minor revisions to our projections.
On the liquidity front, the Governor reiterated the RBI's commitment to maintaining comfortable liquidity conditions through timely interventions as required. We expect the RBI to continue liquidity injection measures, particularly in the second half of March when tax-related outflows typically intensify. A comfortable liquidity condition is critical for transmission of the previous rate cuts. On the external front, easing trade policy uncertainties after the recent trade deals are likely to lend some support to the rupee. This may allow the RBI to scale back its forex market interventions, which had increased in the recent months amid elevated volatility. Reduced intervention would be supportive of rupee liquidity. Going ahead, we do not expect further rate cuts from the RBI unless downside tail risks to growth materialise. End
Compiled by Priyasmita Dutta
Filed by Tanima Banerjee
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