The Reserve Bank of India (RBI) has kept the policy repo rate unchanged at 5.25%, in line with market expectations, as it continues to monitor inflation risks arising from higher global crude oil prices and their potential impact on the domestic economy. The decision reflects the central bank's preference to assess incoming economic data before making any further policy changes. 
The Monetary Policy Committee (MPC) also retained its policy stance, indicating that future decisions will continue to depend on inflation and growth trends. While the RBI made a slight upward revision to its economic growth forecast and a marginal reduction to its inflation projection, it maintained a cautious outlook amid global and domestic uncertainties. 
Dipti Deshpande, Senior Director and Principal Economist at CRISIL, said the decision was in line with expectations. She noted that the revised growth and inflation forecasts reflected the RBI's confidence in the resilience of the Indian economy, supported by government policy measures. She added that retail inflation is expected to rise gradually in the coming months due to the fading impact of Goods and Services Tax (GST) rate cuts, higher input costs being passed on by manufacturers and rising freight costs. 
Aditi Nayar, Chief Economist at ICRA Ltd, said the policy decision had largely been anticipated as inflationary pressures have not yet become broad-based. She observed that the RBI's revised forecasts appeared appropriate, assuming global crude oil prices remain in the range of USD 80–85 per barrel along with a moderate rainfall deficit. She also said the central bank's policy statement carried a balanced tone and did not indicate that an interest rate hike was imminent. 
Sakshi Gupta, Principal Economist at HDFC Bank, said the possibility of an interest rate increase during the third quarter of FY27 remains low. According to her, the RBI's commentary suggested that any future rate hike would require widespread and sustained inflationary pressures rather than temporary increases in oil or food prices. She added that the central bank remains focused primarily on domestic inflation and economic growth despite expectations of tighter monetary policy in developed economies. 
Madhavi Arora, Chief Economist at Emkay Global Financial Services, said the RBI has adopted a cautious but constructive approach, balancing risks arising from geopolitical tensions in the Middle East, tighter global financial conditions and weather-related uncertainties against resilient domestic economic growth and healthy Foreign Currency Non-Resident (FCNR) deposit inflows. 
Apoorva Javadekar, Chief Economist at Muthoot Fincorp, said the RBI's wait-and-watch approach was appropriate given uncertainty surrounding global oil prices. He pointed out that easing geopolitical risks, improving monsoon conditions, adequate food stocks and inflation remaining within the RBI's target range have provided room to keep interest rates unchanged. He also noted that a rate hike at this stage could have adversely affected rural economic activity, which has already shown signs of slowing. 
Radhika Rao, Senior Economist and Executive Director at DBS Bank, said the RBI has shown patience without becoming complacent. She said the MPC has retained flexibility while assessing whether current inflationary pressures remain temporary or evolve into a broader inflation cycle. 
Upasna Bhardwaj, Chief Economist at Kotak Mahindra Bank, said the policy outcome was in line with expectations and reflected a balanced assessment of prevailing risks. She believes there is still room for a cumulative 50 basis points increase in interest rates during the second half of FY27 if inflationary conditions warrant such action. 
Vikram Chhabra, Senior Economist at 360 ONE Asset, said the RBI could keep interest rates unchanged for an extended period if geopolitical conditions improve and the monsoon remains close to normal. However, he cautioned that persistently high crude oil prices and weak agricultural output resulting from an adverse monsoon could increase food inflation and eventually require a rate hike before the end of FY27. 
The RBI's decision was also viewed positively by the real estate industry, with experts saying stable borrowing costs will help sustain buyer confidence and investment activity. 
Anuj Puri, Chairman of ANAROCK Group, said the unchanged policy rate provides stability during a period of macroeconomic uncertainty. However, he noted that keeping rates unchanged alone may not be sufficient to revive demand in the affordable and mass-market housing segments. 
Anshuman Magazine, Chairman and CEO – India, South-East Asia, Middle East and Africa at CBRE, said stable interest rates are expected to support housing demand as the festive season approaches, which is traditionally one of the strongest periods for residential sales. He expects demand to remain healthy during the second half of 2026, particularly in the mid-income and premium housing segments where homebuyers are more sensitive to interest rate movements. 
Shishir Baijal, International Partner, Chairman and Managing Director of Knight Frank India, said policy continuity is likely to support housing demand as well as investment across both residential and commercial real estate while providing a stable environment for the sector's long-term growth. 
The RBI had reduced the repo rate in previous policy actions to support economic activity as inflation moderated. With inflation currently remaining within the central bank's target range but global risks continuing to persist, the latest policy decision indicates that the RBI is prioritising stability while closely monitoring developments in crude oil prices, inflation and domestic economic growth before considering any further changes to interest rates. 
Source Reuters