By Mr. Umesh Mohanan, ED & CEO at Indel Money
“The RBI MPC‘s decision to maintain the repo rate at 5.25% reflects a balanced and forward-looking approach as the economy navigates evolving global and domestic challenges. While inflation is expected to edge up in the coming quarters, the pressures remain largely supply-driven, stemming from higher food and fuel prices amid geopolitical developments, rather than broad-based demand pressures. In this backdrop, maintaining the policy rate and retaining flexibility is a prudent step that allows the RBI to respond appropriately to evolving macroeconomic conditions.
The upward revision of India’s FY27 GDP growth forecast to 6.7% also underscores the resilience of the domestic economy. Strong domestic demand, sustained manufacturing activity, robust services exports, and improving merchandise exports continue to support growth despite uncertainties surrounding global trade and geopolitical tensions. At the same time, the RBI Governor’s assessment of healthy capitalisation, improving asset quality, adequate liquidity, and stronger profitability across banks and NBFCs reinforces confidence in the financial sector’s ability to support economic growth.
Although the merchandise trade deficit has widened due to higher imports of crude oil, electronics and gold, India’s external position remains resilient, supported by a current account surplus in the early part of the fiscal year, healthy remittance inflows, strong services exports and buoyant FDI. For the gold loan industry, policy continuity and a stable financial environment are positive developments. Gold loans continue to provide households, MSMEs, traders and small businesses with timely access to formal credit, and we expect demand for secured lending to remain healthy as economic activity gathers momentum .”