RBI repo rate remains at 5.5%, FY26 GDP growth is higher, and inflation is lower

Regarding the impact of tariffs on India, the Reserve Bank of India (RBI) has kept its repo rate unchanged, demonstrating that it is in a wait-and-watch phase. In addition, the RBI has revised its earlier estimate of India's inflation rate to 2.6% in FY26 from 3.1%. India's GDP grew at a pace of 6.8% in FY26, up from 6.5% previously.

The position on monetary policy is still neutral. Previously, 15 analysts anticipated a quarter-point drop in the RBI repo rate, while the majority of experts (24 out of 39 polled by Bloomberg News) had forecast it would remain at 5.5%. There was a reason to ease, according to many of those who were predicting a hold.

The current situation creates the possibility of a rate reduction in the December policy. For clues about future monetary policy, RBI Governor Sanjay Malhotra's remarks and predictions for economic growth are being attentively monitored. According to economists, this cycle might see the repo rate go as low as 5%.