Industry, economists welcome RBI's status quo on rates, say policy stability to support investment and growth

Industry bodies, economists and real estate consultants welcomed the Reserve Bank of India's decision to keep the benchmark repo rate unchanged at 5.25%, saying the move provides policy stability and reinforces business confidence at a time of persistent geopolitical uncertainties and supply-driven inflationary pressures. They also backed the central bank's decision to raise its FY27 GDP growth forecast to 6.7% while lowering its inflation projection to 5%, describing the move as a reflection of India's resilient macroeconomic fundamentals.

The Reserve Bank's Monetary Policy Committee (MPC), chaired by Governor Sanjay Malhotra, on Wednesday unanimously retained the repo rate at 5.25% and maintained its neutral policy stance, a decision that was widely anticipated by markets. The move comes even as Consumer Price Index (CPI)-based retail inflation accelerated to 4.38% in June, above the RBI's medium-term target of 4%, with policymakers continuing to monitor volatile global energy prices and supply disruptions stemming from the ongoing West Asia conflict. The next bi-monthly MPC meeting is scheduled for October 5-7, 2026.

ASSOCHAM hails growth outlook, policy continuity

Industry chamber ASSOCHAM said the RBI's decision to maintain the repo rate at 5.25% would reinforce business confidence by ensuring interest rate stability, supporting investment and sustaining India's growth momentum amid an uncertain global economic environment.

ASSOCHAM President Nirmal K. Minda said the central bank's decision reflected confidence in India's strong macroeconomic fundamentals. A stable policy rate, he said, would strengthen business sentiment, encourage investments and provide policymakers with the flexibility to respond to evolving global developments. He also welcomed the RBI's upward revision of FY27 GDP growth to 6.7%, noting that it was close to ASSOCHAM's own projection of 7% for the fiscal year.

Real estate sees festive season tailwinds

Real estate consultancy Knight Frank India described the RBI's decision as a well-calibrated move that balances growth concerns with inflation management in an environment marked by supply-side price pressures and geopolitical uncertainty. Shishir Baijal, International Partner, Chairman and Managing Director of Knight Frank India, said a stable interest rate environment would reinforce homebuyer confidence, provide greater certainty to businesses and investors, and sustain demand across residential and commercial real estate.

Echoing similar views, CBRE Chairman & CEO – India, Southeast Asia, Middle East & Africa, Anshuman Magazine, said predictable borrowing costs ahead of the festive season are expected to support residential demand, particularly in the mid- and premium-housing segments. He added that healthy office leasing, warehousing and data centre demand continue to underpin the commercial real estate market, although policymakers would need to remain vigilant on inflation risks.

Experts see balanced policy approach

Aditi Nayar, Chief Economist at ICRA Ltd, said the status quo on the repo rate and policy stance was largely on expected lines, given the limited evidence of broad-based inflationary pressures.

She said the RBI's marginal revisions to growth and inflation projections appropriately account for geopolitical volatility, monsoon developments and crude oil prices in the $80-85 per barrel range. The overall tone of the policy statement remained neutral and does not indicate that monetary tightening is imminent, suggesting policymakers remain comfortable with the current policy setting while continuing to monitor incoming macroeconomic data.

Sharing a similar assessment, Vivek Iyer, Partner and Financial Services Risk Leader at Grant Thornton Bharat, said the MPC had once again struck a fine balance between supporting growth and preserving macroeconomic stability. He said benign core inflation and well-anchored inflation expectations allowed the RBI to maintain the status quo, although food and fuel inflation would continue to require close monitoring in the months ahead.