By Sanjay Agarwal, Founder, MD & CEO, AU Small Finance Bank on RBI MPC announcement today, for your perusal.
“By choosing to hold the repo rate steady at 5.25 per cent and monetary policy stance unchanged in today’s policy, the Monetary Policy Committee essentially signals that while the economy has resilience, it is pragmatic to exercise caution amidst unprecedented global uncertainties. Inflation and growth projections for the financial year 2026-27 at 4.6 per cent and 6.9 per cent, respectively are realistic given the likely spillover effects of the West Asia conflict.
Market has digested RBI’s caution about upside risks to inflation and downside risk to growth over the baseline scenario due to rise in input costs following supply chain disruption relating to crude oil, gas and other commodities. The pause provides stability to borrowers and supports momentum in credit growth, particularly to MSMEs while giving the central bank flexibility to respond to emerging risks through pro-active liquidity management.”
