RBI MPC holds repo rate at 5.25% after December cut: How bankers and economists reacted
1 / 8The Reserve Bank of India (RBI), in the first policy post-Budget 2026, has kept the repo rate unchanged at 5.25%, extending its pause after the December 2025 rate cut. With the Monetary Policy Committee (MPC) maintaining a neutral stance, the policy signals a shift in focus from rate cuts to liquidity management and growth support. Here’s how bankers, economists and markets are reacting to the RBI’s latest policy move.
2 / 8Upasna Bhardwaj: Upasna Bhardwaj, Chief Economist at Kotak Mahindra Bank, said, “For now, it appears that the RBI’s focus will largely be on liquidity, and more or less, we are done with the rate-cutting cycle. We will be seeing a prolonged pause from now on, unless there is a dramatic change in the trajectory suggested by the new series.”
3 / 8Shobhit Mehrotra: Shobhit Mehrotra, Head Fixed Income, HDFC AMC, said, “Post this policy, the market would get around to the view that further cuts are far away, if any. And it’s going to be a very long pause with only intervention coming from RBI in the form of providing liquidity.”
4 / 8Kaushik Das: Kaushik Das, Chief Economist at Deutsche Bank, said, “RBI has done the right thing to not give their FY27 gross domestic product (GDP) and inflation forecast for the whole year, given that we will get a new series of GDP and consumer price index (CPI).”
5 / 8Ajay Srivastava: Ajay Srivastava, MD, Dimensions Corporate Finance Services, said, “RBI has limited room to cut or raise rates immediately, but market fundamentals point to higher rates ahead, with equity markets already reflecting this expectation.”
6 / 8Ashwini Kumar Tewari: Ashwini Kumar Tewari, MD at SBI, said, “Having sorted out the free trade agreement (FTA) and the India-US trade deal, the focus comes back to growth, and banks have to play an important role.”
7 / 8Ashhish Vaidya: Ashhish Vaidya, DBS Bank India, said, “The 10-year yield may end somewhere around 6.95% by March end. I continue to see that the global fixed income markets will continue to experience sell-offs, but particularly in the longer end. So, the shorter end will be well anchored, but the longer end, we’ll see some upticks across the globe.”
8 / 8Pranjul Bhandari: Pranjul Bhandari, Chief India Economist, HSBC, said, “I do think it is an important policy because it gives a clear pivot that RBI is going to be steady on rates from here. So far it’s been playing like a T-20 match, but going forward is going to play more like a test match model in which it is not the primary baton holder of growth.”
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