PHDCCI Backs RBI’s Neutral Stance as Rates Remain Unchanged

PHDCCI Backs RBI’s Neutral Stance as Rates Remain Unchanged

RBI Keeps Rates Unchanged; Neutral Stance Backed by Soft Inflation, Strong Growth, but challenging External Sector: PHDCCI

Monetary Policy Committee (MPC) of the Reserve Bank has decided to maintain the status quo on the policy repo rate at 5.25%, while maintaining neutral stance, given the backdrop of moderate headline inflation and high GDP growth for 2025-26 at 7.4% amidst geopolitical risks remains, said Mr. Rajeev Juneja.

On the inflation front, RBI’s assessment that headline CPI inflation has remained benign, with projections of 2.1 per cent for 2025–26, provides comfort to both consumers and producers. Moderation in food prices, stable core inflation (excluding food and fuel), and adequate buffer stocks are positive factors for price stability and GDP growth.

At the same time, the RBI’s acknowledgment of potential upside risks from geopolitical tensions, commodity price volatility, and precious metal prices highlights the need for continued vigilance, he added.

Stable interest rate environment, coupled with benign inflation expectations, can help sustain investment momentum. High capacity utilisation, healthy balance sheets of corporates and financial institutions, and robust credit growth are likely to support private sector investment decisions. The government’s continued thrust on capital expenditure is expected to crowd in private investment and strengthen medium-term growth prospects, said Mr. Rajeev Juneja.

Near-term outlook suggests that food supply prospects remain positive on the back of healthy kharif production and favourable rabi sowing, said Mr. Rajeev Juneja.

“RBI’s positive outlook on the external sector, particularly the expectation that merchandise exports may receive a boost from recently concluded EU-India FTA and US tariff deal. Trade diversification will help mitigate risks arising from a volatile global trade environment. However, for sustained export competitiveness continued focus on logistics efficiency, trade facilitation, and access to affordable finance for exporters, especially MSMEs”.

“RBI’s decision is growth-supportive and confidence-enhancing for industry. A predictable monetary policy framework, combined with ongoing structural reforms and fiscal support through public capex, can help India sustain its growth trajectory at the same time navigating global uncertainties. Continued coordination between monetary and fiscal policy to strengthen India’s macroeconomic fundamentals augurs well for long-term economic prospects,” says CEO and Secretary General, PHDCCI, Dr. Ranjeet Mehta.