Axis Max Life Insurance CIO Sachin Bajaj on RBI Policy
This story was originally published at 13:13 IST on 7 October 2026
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MUMBAI - Sachin Bajaj, chief investment officer, Axis Max Life Insurance, said the following on the Reserve Bank of India's fourth bi-monthly monetary policy statement for 2026-27 (Apr-Mar) detailed Wednesday:
The Monetary Policy Committee meeting was held against a backdrop of challenging global macroeconomic conditions, persistent geopolitical uncertainties, rising bond yields in advanced economies, and elevated inflationary pressures. As widely expected, the policy committee unanimously decided to raise the policy repo rate by 25 basis points to 5.50% and changed its policy stance from "neutral" to "calibrated tightening". While the rate hike was largely anticipated, the shift in policy stance comes as a modest surprise.
The central bank highlighted that India's economic growth remains broad-based. However, uncertainties such as a weaker monsoon and potential volatility in oil prices continue to pose upside risks to the inflation trajectory. Overall, the policy signals a clear shift towards containing inflation and anchoring inflation expectations.
Inflation is expected to move towards the upper end of the RBI's tolerance band over the coming months. Additionally, the conflict in West Asia and a weaker monsoon are likely to continue exerting supply-side inflationary pressures. This backdrop increases the likelihood of another rate hike at the MPC's December policy meeting. Given that current bond yields are already factoring in the possibility of three to four rate hikes during the current cycle, we expect the 10-year government security yield to remain elevated in the 7.25-7.50% range for the remainder of the year. End
Compiled by Arya S. Biju
Filed by Deepshikha Bhardwaj
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