The Reserve Bank of India’s latest monetary policy decision has met market expectations, with economists indicating limited scope for additional repo rate easing amid evolving inflation risks. Reacting to the policy announcement, Upasna Bhardwaj, Chief Economist at Kotak Mahindra Bank, said the Monetary Policy Committee (MPC) delivered outcomes “completely in line with expectations across rates and stance.”
Bhardwaj noted that the inflation outlook for the first half of FY27 has been revised marginally upward, reflecting emerging pressures in the macroeconomic environment. She pointed out that uncertainty continues to surround growth and inflation projections as markets await the release of the new statistical series, which may provide clearer direction for economic assessments.
Highlighting key risks, Bhardwaj said the recent uptick in global commodity prices, along with a relatively weaker currency, could pose upside risks to inflation. These developments, she added, may limit the central bank’s ability to pursue further monetary easing in the near term.
“We therefore see limited room for additional easing on repo rate front, with RBI’s focus expected to be on ensuring stability on the liquidity front in the year ahead,” Bhardwaj said, indicating that liquidity management is likely to remain a policy priority going forward.
